# **UNITEDSTATES**

**SECURITIES AND EXCHANGECOMMISSION**

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

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## **FORM10-Q**

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# **QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)OF**

# **THESECURITIES EXCHANGE ACT OF 1934**

# **For thequarterly period ended September 30, 2006**

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

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**REEF GLOBAL ENERGY 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 checkmark whether the registrant (1) has filed all reports required to be filedby Section 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 x     No o   

Indicate by check mark whether the registrant is alarge accelerated filer, an accelerated filer, or a non-accelerated filer. Seedefinition of “accelerated filer and large accelerated filer” in Rule 12b-2 ofthe Exchange Act

Large accelerated filer o                           Accelerated filer o                                Non-acceleratedfiler x

Indicate by check mark whether the registrant is ashell company (as defined in Rule 12b-2 of the Exchange Act). Yes o     No x

As of November 13, 2006, the registrant had 25.028 units held by themanaging general partner, 125.000 units of additional general partner interestand 349.972 units of limited partner interest 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**
| ** **                                              | ** ** | **September 30,** | ** ** | **December 31,** | ** ** |
|---------------------------------------------------------|------------|------------------------|------------|-----------------------|------------|
| ** **                                              | ** ** | **2006**               | ** ** | **2005**              | ** ** |
| ** **                                              | ** ** | **(Unaudited)**        | ** ** | ** **            | ** ** |
| **Assets**                                              | ** ** | ** **             | ** ** | ** **            | ** ** |
| **Current  assets:**                                    | ** ** | ** **             | ** ** | ** **            | ** ** |
| Cash and cash  equivalents                              | ** ** | $                      | 148,960    |                  | $          | 757,983 |   |
| Accounts  receivable from affiliates                    |       | 25,142                 |       | 10,446                |       |
| Accrued interest  receivable                            |       | —                 |       | 356                   |       |
| **Total  current assets**                               |       | 174,102                |       | 768,785               |       |
| ** **                                              | ** ** | ** **             | ** ** | ** **            | ** ** |
| **Property  and equipment:**                            | ** ** | ** **             | ** ** | ** **            | ** ** |
| Oil and gas  properties, full cost method of accounting |       | 8,481,556              |       | 7,928,747             |       |
| Drilling in  progress                                   |       | —                 |       | 188,745               |       |
| Accumulated  depreciation and depletion                 |       | (8,359,975             | )          | (5,404,092            | )          |
| **Net  property and equipment**                         |       | 121,581                |       | 2,713,400             |       |
| ** **                                              | ** ** | ** **             | ** ** | ** **            | ** ** |
| **Total assets**                                        | ** ** | $                      | 295,683    |                  | $          | 3,482,185 |   |
| ** **                                              | ** ** | ** **             | ** ** | ** **            | ** ** |
| **Liabilities and partners’  equity**              | ** ** | ** **             | ** ** | ** **            | ** ** |
| **Current  liabilities:**                               | ** ** | ** **             | ** ** | ** **            | ** ** |
| Accounts payable                                        | ** ** | $                      | —     |                  | $          | 32,908 |   |
| Accounts payable  to affiliates                         |       | 4,230                  |       | 235,993               |       |
| **Total  current liabilities**                          |       | 4,230                  |       | 268,901               |       |
| ** **                                              | ** ** | ** **             | ** ** | ** **            | ** ** |
| **Non-current  liabilities:**                           | ** ** | ** **             | ** ** | ** **            | ** ** |
| Asset retirement  obligation                            |       | 93,221                 |       | 87,725                |       |
| ** **                                              | ** ** | ** **             | ** ** | ** **            | ** ** |
| **Partners’  equity:**                             | ** ** | ** **             | ** ** | ** **            | ** ** |
| General partners                                        |       | 51,239                 |       | 779,731               |       |
| Limited partners                                        |       | 143,460                |       | 2,183,072             |       |
| Managing general  partner                               |       | 3,533                  |       | 162,756               |       |
| **Total  partners’ equity**                        |       | 198,232                |       | 3,125,559             |       |
| ** **                                              | ** ** | ** **             | ** ** | ** **            | ** ** |
| **Total liabilities and partners’ equity**         | ** ** | $                      | 295, 683   |                  | $          | 3,482,185 |   |

 

*Seeaccompanying notes to condensed financial statements.*

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

**Condensed Statements ofOperations**
| ** **                                  | ** ** | **For the three months ended  September 30 (unaudited)** | ** ** | **For the nine months ended   September 30 (unaudited)** | ** ** |
|---------------------------------------------|------------|----------------------------------------------------------------------------------------|------------|---------------------------------------------------------------------------------------------|------------|
| ** **                                  | ** ** | **2006**                                                                               | ** ** | **2005**                                                                                    | ** ** | **2006** | ** ** | **2005** | ** ** |
| ** **                                  | ** ** | ** **                                                                             | ** ** | ** **                                                                                  | ** ** | ** ** | ** ** | ** ** | ** ** |
| **Revenues:**                               |       |                                                                                   |       |                                                                                        |       |   |   |   |   |
| Oil and gas income                          | ** ** | $                                                                                      | 91,828     |                                                                                        | $          | 51,572 |   | $ | 243,406 |   | $ | 76,053 |   |
| Interest income                             |       | 968                                                                                    |       | 9,957                                                                                       |       | 6,208 |   | 48,616 |   |
| **Total  revenues**                         |       | 92,796                                                                                 |       | 61,529                                                                                      |       | 249,614 |   | 124,669 |   |
| ** **                                  | ** ** | ** **                                                                             | ** ** | ** **                                                                                  | ** ** | ** ** | ** ** | ** ** | ** ** |
| **Costs  and expenses:**                    | ** ** | ** **                                                                             | ** ** | ** **                                                                                  | ** ** | ** ** | ** ** | ** ** | ** ** |
| Lease operating expenses                    |       | 43,239                                                                                 |       | 7,107                                                                                       |       | 73,615 |   | 7,367 |   |
| Production taxes                            |       | 8,197                                                                                  |       | 1,642                                                                                       |       | 13,539 |   | 2,751 |   |
| General and administrative                  |       | 13,535                                                                                 |       | 13,798                                                                                      |       | 70,553 |   | 79,240 |   |
| Accretion of asset retirement obligation    |       | 1,473                                                                                  |       | 1,199                                                                                       |       | 4,323 |   | 1,250 |   |
| Depreciation, depletion and amortization    |       | 327,938                                                                                |       | 2,095,359                                                                                   |       | 2,955,883 |   | 4,060,091 |   |
| **Total  costs and expenses**               |       | 394,382                                                                                |       | 2,119,105                                                                                   |       | 3,117,913 |   | 4,150,699 |   |
|                                        |       |                                                                                   |       |                                                                                        |       |   |   |   |   |
| **Net  loss**                               | ** ** | $                                                                                      | (301,586   | )                                                                                           | $          | (2,057,576 | ) | $ | (2,868,299 | ) | $ | (4,026,030 | ) |
|                                        |       |                                                                                   |       |                                                                                        |       |   |   |   |   |
| Net loss per  general partner unit          |       | $                                                                                      | (613.06    | )                                                                                           | $          | (4,079.23 | ) | $ | (5,704.75 | ) | $ | (7,967.51 | ) |
| Net loss per  limited partner unit          |       | $                                                                                      | (613.06    | )                                                                                           | $          | (4,079.23 | ) | $ | (5,704.75 | ) | $ | (7,967.51 | ) |
| Net loss per managing  general partner unit |       | $                                                                                      | (415.48    | )                                                                                           | $          | (4,796.96 | ) | $ | (6,340.97 | ) | $ | (9,656.70 | ) |

 

*See accompanying notes tocondensed financial statements.*

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

**Condensed Statements of CashFlows**
| ** **                                                                       | ** ** | **For the nine months ended September 30,  (unaudited)** | ** ** |
|----------------------------------------------------------------------------------|------------|----------------------------------------------------------------------------------------|------------|
| ** **                                                                       | ** ** | **2006**                                                                               | ** ** | **2005** | ** ** |
| **Operating  Activities**                                                        | ** ** | ** **                                                                             | ** ** | ** ** | ** ** |
| **Net loss**                                                                     | ** ** | $                                                                                      | (2,868,299 | ) | $ | (4,026,030 | ) |
| Adjustments for non-cash transactions:                                           |       |                                                                                   |       |   |   |
| Depreciation, depletion and amortization                                         |       | 2,955,883                                                                              |       | 4,060,091 |   |
| Accretion of asset retirement obligation                                         |       | 4,323                                                                                  |       | 1,250 |   |
| Adjustments to reconcile net loss to net cash  provided by operating activities: |       |                                                                                   |       |   |   |
| **Changes in operating assets and liabilities:**                                 | ** ** | ** **                                                                             | ** ** | ** ** | ** ** |
| Accounts receivable                                                              |       | 356                                                                                    |       | (43,462 | ) |
| Accounts receivable from affiliates                                              |       | (18,600                                                                                | )          | (25,454 | ) |
| Accounts payable                                                                 |       | (15,896                                                                                | )          | 17,058 |   |
| Accounts payable to affiliates                                                   |       | (6,344                                                                                 | )          | 2,754 |   |
| **Net cash provided by (used in) operating  activities**                         |       | 51,423                                                                                 |       | (13,793 | ) |
| ** **                                                                       | ** ** | ** **                                                                             | ** ** | ** ** | ** ** |
| **Investing  Activities**                                                        | ** ** | ** **                                                                             | ** ** | ** ** | ** ** |
| Property acquisition and development                                             |       | (605,322                                                                               | )          | (4,345,393 | ) |
| **Net cash used in investing activities**                                        |       | (605,322                                                                               | )          | (4,345,393 | ) |
| ** **                                                                       | ** ** | ** **                                                                             | ** ** | ** ** | ** ** |
| **Financing  Activities**                                                        | ** ** | ** **                                                                             | ** ** | ** ** | ** ** |
| Partner capital contributions                                                    |       | 13,376                                                                                 |       | 477,321 |   |
| Distributions to partners                                                        |       | (68,500                                                                                | )          | (45,100 | ) |
| **Net cash provided by (used in) financing  activities**                         |       | (55,124                                                                                | )          | 432,221 |   |
| ** **                                                                       | ** ** | ** **                                                                             | ** ** | ** ** | ** ** |
| **Net  decrease in cash and cash equivalents**                                   |       | (609,023                                                                               | )          | (3,926,965 | ) |
| Cash and cash  equivalents at December 31                                        |       | 757,983                                                                                |       | 5,002,892 |   |
| **Cash  and cash equivalents at September 30**                                   | ** ** | $                                                                                      | 148,960    |   | $ | 1,075,927 |   |
| ** **                                                                       | ** ** | ** **                                                                             | ** ** | ** ** | ** ** |
| **Non-cash  investing transactions:**                                            | ** ** | ** **                                                                             | ** ** | ** ** | ** ** |
| Increase in property additions included in accounts  payable to affiliates       | ** ** | $                                                                                      | —     |   | $ | 47,973 | ** ** |
| Increase in property additions included in accounts  payable                     | ** ** | $                                                                                      | —     |   | $ | 967 | ** ** |
| Additions to property and asset retirement  obligation                           | ** ** | $                                                                                      | 1,173      |   | $ | 74,154 | ** ** |
| **Non-cash  financing transactions:**                                            | ** ** |                                                                                   |       |   | ** ** |
| Managing partner  contributions included in accounts receivable from affiliates  | ** ** | $                                                                                      | 6,542      |   | — |   |

 

*See accompanying notes tocondensed financial statements.*

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

**Notes toCondensed Financial Statements (unaudited)**

**September 30, 2006**

**1.Organization and Basis of Presentation**

Thefinancial statements for Reef Global Energy IV, L.P. (the Partnership) havebeen prepared pursuant to the rules and regulations of the Securities andExchange Commission (SEC). Certain information and footnote disclosure normallyincluded in annual financial statements prepared in accordance with accountingprinciples generally accepted in the United States have been condensed oromitted pursuant to those rules and regulations. We have recorded alltransactions and adjustments necessary to fairly present the financialstatements included in this Form 10-Q. The adjustments are normal andrecurring. The following notes describe only the material changes in accountingpolicies, account details, or financial statement notes during the first ninemonths of 2006. Therefore, please read these condensed financial statements andnotes to condensed financial statements together with the audited financialstatements and notes to financial statements contained in the Partnership’sReport on Form 10-K for the period ended December 31, 2005 (the 2005 10-K).

**2.Summary of Accounting Policies**

**Oil andGas Properties**

The Partnership follows the full cost method of accounting for crudeoil and natural gas properties. Under this method, all direct costs and certainindirect costs associated with acquisition of properties and successful as wellas unsuccessful 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. During the three and nine month periods endedSeptember 30, 2006, the Partnership recognized property impairment expense of$0 and $2,311,286.

**Asset Retirement Obligations**

Statement of Financial Accounting Standards No. 143,“Accounting for Retirement Obligations” (SFAS 143) addresses accounting andreporting for obligations associated with the retirement of tangible long-livedassets and the associated asset retirement costs. SFAS 143 requires that thefair value of a liability for an asset’s retirement obligation be recorded inthe period in which it is incurred and the corresponding cost capitalized byincreasing the carrying amount of the related long-lived asset. The liabilityis accreted to its then present value each period, and the capitalized cost isdepreciated over the useful life of the related asset. SFAS 143 is effectivefor the Partnership as of its inception date.

The following table summarizes the Partnership’sasset retirement obligation for the nine months ended September 30, 2006 and theyear ended December 31, 2005.
|                                        | ** ** | **Nine months  ended September  30, 2006** | ** ** | **2005** | ** ** |
|----------------------------------------|------------|-----------------------------------------------------------|------------|----------|------------|
| Beginning asset  retirement obligation | ** ** | $                                                         | 87,725     |     | $          | — |   |
| Additions  related to new properties   |       | 1,173                                                     |       | 85,037   |       |
| Accretion  expense                     |       | 4,323                                                     |       | 2,688    |       |
| Ending asset retirement  obligation    | ** ** | $                                                         | 93,221     |     | $          | 87,725 |   |

 

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**3.Transactions with Affiliates**

ThePartnership has no employees. Reef Exploration, L.P. (RELP), an affiliate ofReef, employs a staff including geologists, petroleum engineers, landmen andaccounting personnel who administer all of the Partnership’s operations. ThePartnership reimburses RELP for direct and administrative services at cost.During the three and nine month periods ended September 30, 2006, thePartnership incurred $7,092 and $14,168 of administrative costs, respectively.

RELPprocesses revenues and joint interest billings on behalf of the Partnership. AtSeptember 30, 2006, the Partnership had net revenues of $24,187 due from RELP.The Partnership owed RELP $5,587 for administrative costs provided by RELP. ThePartnership settles its balances with RELP on a quarterly basis. In addition,the Partnership owes joint interest billing charges of $4,230 to Reef Oil &Gas Partners, L.P. (Reef). The Partnership settles its balances with Reef on a quarterlybasis.

ReefOil & Gas Partners, L.P, the managing general partner, contributes 1% ofall leasehold, drilling and completion costs when incurred, in addition topurchasing 5% of the Partnership units. During the three and nine month periodsended September 30, 2006, this 1% obligation totaled $6,542 and $9,472. The$6,542 due for the third quarter is shown as a receivable from affiliates.These amounts have been received by the Partnership during November 2006.

**4. Partnership Equity**

Information regarding the number of units outstandingand the net loss per type of Partnership unit for the three and six monthperiods ended September 30, 2006 is detailed below:

For the three months ended September 30, 2006
| Type of Unit          | ** ** | **Number of  Units** | ** ** | **Net loss** | ** ** | **Net loss per  unit** | ** ** |
|---------------------------------|------------|---------------------------|------------|-------------------|------------|----------------------------------|------------|
| Managing general  partner units |       | 25.028                    |       | $                 | (10,399    | )                                | $          | (415.48 | ) |
| General partner  units          |       | 125.000                   |       | (76,633           | )          | (613.06                          | )          |
| Limited partner  units          |       | 349.972                   |       | (214,554          | )          | (613.06                          | )          |
| Total                           |       | 500.000                   |       | $                 | (301,586   | )                                |       |   |
|                                 |            |                           |            |                   |            |                                  |            |  |  |

 

For the nine months ended September 30, 2006
| Type of Unit          | ** ** | **Number of  Units** | ** ** | **Net loss** | ** ** | **Net loss per  unit** | ** ** |
|---------------------------------|------------|---------------------------|------------|-------------------|------------|----------------------------------|------------|
| Managing general  partner units |       | 25.028                    |       | $                 | (158,702   | )                                | $          | (6,340.97 | ) |
| General partner  units          |       | 125.000                   |       | (713,094          | )          | (5,704.75                        | )          |
| Limited partner  units          |       | 349.972                   |       | (1,996,503        | )          | (5,704.75                        | )          |
|                            |       |                      |       |              |       |                             |       |
| Total                           |       | 500.000                   |       | $                 | (2,868,299 | )                                |       |   |
|                                 |            |                           |            |                   |            |                                  |            |  |  |

 

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

The following is a discussion of thePartnership’s financial position, results of operations, liquidity and capitalresources. This discussion should be read in conjunction with our financialstatements and the related notes thereto, included in the 2005 10-K.

This Report onForm 10-Q contains forward-looking statements that involve risks anduncertainties. You should exercise extreme caution with respect to allforward-looking statements made in this Report.  Specifically, thefollowing statements are forward-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.

Reefbelieves that it is important to communicate its future expectations to thepartners.  Forward-looking statements reflect the current view ofmanagement with respect to future events and are subject to numerous risks,uncertainties and assumptions, including, without limitation, the factorslisted in the section captioned “RISK FACTORS” contained in the Program’sprospectus and prospectus supplement dated September 21, 2004. Although Reefbelieves that the expectations reflected in such forward-looking statements arereasonable, Reef can give no assurance that such expectations will prove tohave been correct.  Should any one or more of these or other risks oruncertainties materialize or should any underlying assumptions prove incorrect,actual results are likely to vary materially from those described herein. There can be no assurance that the projected results will occur, that thesejudgments or assumptions will prove correct or that unforeseen developmentswill not occur.

Reef,as managing general partner, has a 10% carried interest in the Partnership, inaddition to the interest it owns as a result of it’s purchase of 5.01% of thepartnership units sold and its payment of 1% of all leasehold, drilling, andcompletion costs incurred by the Partnership. Effective August 1, 2006, Reefreduced its carried interest in the Partnership to 5%, and effective November1, 2006 Reef will eliminate its carried interest in the Partnership.

Reefdoes not intend to update its forward-looking statements.  All subsequentwritten and oral forward-looking statements attributable to Reef or personsacting on its behalf are expressly qualified in their entirety by theapplicable cautionary statements.

**Overview**

ReefGlobal Energy IV, L.P. is a Nevada limited partnership formed to acquire,explore, develop, and produce crude oil, natural gas, and natural gas liquidsfor the benefit of its investor partners. The Partnership’s primary purposesare to generate revenues from the production of oil and gas, distribute cashflow to investors, and provide tax benefits to investors. While the majority ofthe Partnership’s proceeds have been used to purchase thirteen prospects uponwhich the Partnership has conducted drilling operations, a small portion ofcapital has been used to purchase existing reserves.

ThePartnership operates solely in the United States. RELP, an affiliate of themanaging general partner, and its predecessor entity OREI, Inc. have expertiseand have drilled and operated wells primarily in Texas and Louisiana since1987. The thirteen prospects purchased by the Partnership are located in Texas,Louisiana and in United States Coastal waters in the Gulf of Mexico.

ThePartnership does not operate in any other industry segment. The Partnership ispermitted but has not and 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.”

**Critical Accounting Policies**

There have been no changes from theCritical Accounting Policies described in the 2005 10-K.

**Liquidity and Capital Resources**

ThePartnership has working capital of $169,872 at September 30, 2006, from whichto pay additional drilling and operations costs. Should any prospect in whichthe Partnership has an interest be determined to warrant additional developmentactivity, the Partnership may issue voluntary partner cash calls of up to$20,000 per

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Partnership unit.The Partnership completed drilling activities during the first quarter of 2006and currently has no plans to issue any voluntary cash calls.

Thetotal capital initially available to the Partnership, net of organization andsyndication costs, was $8,500,000. As of September 30, 2006, the Partnershiphas also received $77,268 in additional capital contributions from Reefrepresenting its obligation to pay for 1% of all leasehold, drilling, andcompletion costs, and has received $74,793 in interest income from theinvestment of partner capital contributions, resulting in total funds availableof approximately $8.652 million.

ThePartnership purchased interests in thirteen prospects upon which thirteen wellshave been drilled. These wells completed drilling operations in February 2006and all successful wells were operational as of July 2006.  As of September 30, 2006 the Partnership hasexpended approximately $8.508 million, including amounts in accounts payable atSeptember 30, 2006. The Partnership does not expect any significant additionalcosts associated with the initial drilling of these thirteen wells. ThePartnership has also accrued approximately $93,000 as the estimated abandonmentliability associated with successful wells drilled by the partnership. ThePartnership has expended approximately $3.086 million in connection with fiveunsuccessful wells drilled, approximately $3.884 million on seven wellscompleted as productive wells, $0.523 million on the purchase of a royaltyinterest in a field in Louisiana, $0.903 million on a well completed during2006 and temporarily shut-in for further geologic evaluation, and $0.112million in general and administrative expenses. In addition, Reef, as managinggeneral partner, agreed in July 2006 that it would pay 100 % of the cost for aworking interest in a well in Louisiana currently drilling. Reef will make anadditional capital contribution to the Partnership, estimated at approximately$100,000, to pay for the drilling cost associated with this well.

**Results of Operations**

**Threemonths ended September 30, 2006 and 2005**

ThePartnership incurred a net loss of $301,586 during the three month period endedSeptember 30, 2006. The Partnership drilled seven productive wells andpurchased royalty interests in three productive wells during the drilling phaseof operations. One of the successful wells and two of the royalty interestwells had ceased production prior to the third quarter of 2006. Operationsduring the quarter include the results from the remaining six productiveworking interest wells and one productive royalty interest well. Cash flow fromoperations totaled $27,825 during the quarter. The loss for the third quarterwas primarily related to non cash depreciation and depletion charges of$327,938. The increase in depletion and depreciation from the $208,050 recordedduring the second quarter was the result of significant declines in theestimated reserves associated with two of the six productive working interestwells. One of the wells ceased production during September and is expected tobe plugged and abandoned. The second well, historically the most productivewell in the fund, underwent two workover operations in an attempt to reducewater production. In each case the well initially showed a good response to theworkover treatments, but subsequently ceased production after approximatelyfifteen to thirty days. The well is currently shut-in while being evaluated forfurther workover operations, and was operational for only about thirty daysduring the third quarter. While oil and gas revenues increased to $91,828during the third quarter compared to $79,801 during the second quarter, the twowells mentioned above contributed approximately $33,500, or 36% of those salesrevenues. Future results of operations will be greatly impacted by the successor failure of the operator to return this well to profitable operations.General and administrative charges totaled $13,535 during the third quarter,and are expected to remain at a similar level during the fourth quarter. Duringthe comparable quarter in 2005, the Partnership had only one productive workinginterest well and two productive royalty wells, compared to seven wells whichwere productive during the third quarter of 2006. The net loss of $2,057,576incurred during the quarter ended September 30, 2005 was primarily the resultof the Partnership drilling one unsuccessful well during the quarter and adownward revision in reserve estimates of previously successful wells, whichresulted in leasehold impairment expense of $1,983,392.

**Ninemonths ended September 30, 2006 and 2005**

Duringthe nine month period ended September 30, 2006, the Partnership incurred a netloss of $2,868,299, compared to a loss of $4,026,030 incurred for the ninemonths ended September 30, 2005. Five unsuccessful wells were drilled duringthe first nine months of 2005, and the Partnership incurred impairment expenseof $3,934,392 as a result of these unsuccessful wells and the fact that thecost of successful wells drilled was in excess of the reserve estimates onsuccessful wells drilled. During the nine months ended September 30, 2006, thePartnership has

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recordedimpairment expense totaling $2,311,286. This impairment has resulted from twoprimary factors. First, the performance levels of the Partnership’s successfulwells have not met initial expectations, leading to reductions from the initialreserve estimates. The reduction in reserve estimates has been compounded bythe fact that reserve values are estimated based upon prices at the end of thequarter. At September 30, 2006, gas prices had fallen by approximately 45% fromlevels at December 31, 2006, while oil prices had increased by approximately1%.

The Partnershiphad six productive working interest wells and one productive royalty interestwell during the first nine months of 2006, as compared to only one productiveworking interest well and two productive royalty interest wells during thefirst nine months of 2005. Cash flow from operations, excluding interestincome, was $85,699 during the first nine months of 2006 compared to a cashdeficit of $13,305 incurred during the first nine months of 2005. Interestincome has declined significantly for 2006 due to the fact that mostPartnership funds were spent on drilling activity during 2005, and thereforefunds available for investment are significantly less than they were in2005.  Based upon prior performance, thePartnership’s most productive well was shut-in in early June. Subsequent tothat date the well has undergone two workover operations in an attempt toreduce water production from the well. In each case the well initially showed agood response to the workover treatments, but subsequently ceased productionafter approximately fifteen to thirty days. The well is currently shut-in whilebeing evaluated for further workover operations, and was operational for onlyabout thirty days during the third quarter. Future results of operations willbe greatly impacted by the success or failure of the operator to return thiswell to profitable operations.

Net proved oil andgas reserves at September 30, 2006 and December 31, 2005 are presented below.The estimated proved reserves of the Partnership include only those quantitieswhich are reasonably expected to be recovered from known oil and gas reservoirsunder current economic and operating conditions. Proved reserves include onlyquantities we expect to recover commercially using current prices, costs,existing regulatory practices, and technology. Therefore, any changes in futureprices, costs, regulations, technology or other unforeseen factors couldmaterially increase or decrease the estimate of proved reserves. The estimatesof proved reserves at September 30, 2006 use closing NYMEX prices of $62.91 perbarrel and $5.62 per MMBTU, compared to December 31 prices of $61.04 per barreland $10.08 per MMBTU.
| Net proved reserves | ** ** | **Oil (BBL)** | ** ** | **Gas (MCF)** | ** ** |
|-------------------------------|------------|--------------------|------------|--------------------|------------|
| December 31,  2005            |       | 4,537              |       | 401,480            |       |
| September 30, 2006            |       | 2,248              |       | 73,720             |       |

 

Thestandardized measure of discounted cash flows is computed by applying the abovequarter end prices, adjusted on a property by property basis for energycontent, quality and transportation costs, and a discount factor of 10% toproved reserves. The standardized measure of discounted cash flows does notpurport to present the fair value of our oil and natural gas reserves.
| Standardized measure of discounted cash flows | ** ** | ** ** | ** ** |
|------------------------------------------------------------------------|------------|------------|------------|
| December 31,  2005                                                     |       | $          | 2,524,655  |   |
| September 30, 2006                                                     |       | $          | 127,070    |   |

 

Ofthe seven productive wells drilled by the Partnership, five were producing asof September 30, 2006. One well ceased production during 2005, and a secondwell ceased production in September 2006. Future operations will besignificantly impacted by the ability of the operator to restore the fund’smost productive well to profitable operations during the fourth quarter.

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

**InterestRate Risk**

The Partnership currently has no borrowings. Thepartnership agreement prohibited bank borrowings during the Partnership’sdrilling phase of operations. The Partnership is permitted to borrow monies orassess partners for developmental activities on the prospects it has drilled,however, at this time the Partnership has no plans to conduct additionalactivities on any of these prospects. The Partnership is subject to interestrate risk solely to the extent that changes in interest rates affect generaleconomic conditions.

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**CommodityPrice Risk**

ThePartnership has not and does not expect to engage in commodity futures tradingor hedging activities or enter into derivative financial instrumenttransactions for trading or other speculative purposes.  The Partnership sells a vast majority of itsproduction from successful oil and gas wells on a month-to-month basis atcurrent spot market prices. Accordingly, the Partnership is at risk for thevolatility in commodity prices inherent in the oil and gas industry, and thelevel of commodity prices has a significant impact on the Partnership’s resultsof operations.

**Item 4.  Controlsand Procedures**

As the ManagingGeneral Partner of the Partnership, Reef maintains a system of controls andprocedures designed to provide reasonable assurance as to the reliability ofthe financial statements and other disclosures included in this report, as wellas to safeguard assets from unauthorized use or disposition. As of the end ofthe period 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) under 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 concluded that ourdisclosure controls and procedures are effective at a reasonable assurancelevel for gathering, analyzing and disclosing the information the Partnershipis required to disclose in the reports it files under the Securities ExchangeAct of 1934 within the time periods specified in the SEC’s rules and forms.During our fiscal quarter ended September 30, 2006, no change occurred in ourinternal control over financial reporting (as defined in Rule 13a-15(f) underthe Securities Exchange Act of 1934) that has materially affected, or isreasonably likely to materially affect, our internal control over financialreporting.

**PART II – OTHER INFORMATION**

**Item 1. Legal Proceedings**

None

**Item 1A.  Risk Factors**

In addition to the other information set forth in thisreport, you should carefully consider the risk factors discussed in Part I,Item 1A in the 2005 10-K, which could materially affect our business, financialcondition or future results. The risks described in our 2005 10-K are not theonly risks facing the Partnership. Additional risks and uncertainties notcurrently known to us or that we currently deem to be immaterial also maymaterially adversely affect our business, financial condition and/or operatingresults. Except for the additional risk factor provided below, there have beenno material changes from the risk factors previously disclosed in the 200510-K.

*Our dependence on third parties for the processingand transportation of oil and gas may adversely affect the Partnership’srevenues and, consequently, the distribution of net cash flows to investorpartners.* We rely on third parties to process and transportthe oil and gas produced by the Partnership’s successful wells. In the event athird party upon whom we rely is unable to provide transportation or processingservices, and another third party is unavailable to provide such services, thePartnership may have to temporarily shut-in successful wells, and revenues tothe Partnership and distributions to investor partners related to those wellsmay be delayed.

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

**Use of Proceeds**

Inconnection with the Registration Statement filed on form S-1 (No. 333-93399)and declared effective May 31, 2001, Reef filed a post-effective amendment tothe Registration Statement on behalf of the Program on September 14, 2001. OnJanuary 10, 2002 Reef filed a final prospectus and commenced the offering ofunits in the Program. All sales of Partnership units were made through theProgram’s dealer-manager, Reef Securities, Inc., and a number of solicitingdealers. The Program filed a prospectus supplement describing Reef GlobalEnergy IV, L.P. on September 21, 2004 and commenced offering units. Theoffering period ended on December 2, 2004.

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During the offering period, the Partnership sold474.972 units to investor partners, consisting of 349.972 limited partner unitsand 125 general partner units. Reef purchased 25.028 limited partner units,equaling 5.01% of the total Partnership units sold. Total offering proceedswere $9,924,916. All units except those purchased by Reef paid a 15% managementfee to Reef to pay for the Partnership organization and offering costs,including sales commissions. These costs totaled $1,424,916, leaving capitalcontributions of $8,500,000 available for Partnership oil & gas operations.In addition, the Partnership has available $74,793 of interest income and$77,268 of additional capital contributions from Reef in connection with itsobligation to pay 1% of all leasehold, drilling and completion costs, for atotal of $8.652 million. As of September 30, 2006 the Partnership had expended$8.508 million on oil and gas operations, including amounts in accounts payableat June 30, 2006, and has accrued an estimated abandonment liability ofapproximately $93,000 in connection with successful wells drilled by thePartnership.

**Item 3.  Defaults Upon Senior Securities**

None

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

None

**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:   November  14, 2006 |       | By:                         | /s/ Michael J. Mauceli |   |
| ** **                                 | ** ** |                        | **Michael J. Mauceli** |
|                                       |       |                        | Manager and  Member |
| * *                                   |       |                        | *(principal  executive officer)* |
| * *                                   |       |                        | * * |
| * *                                   |       |                        | * * |
| Dated:   November  14, 2006 |       | By:                         | /s/ Daniel C. Sibley |   |
| ** **                                 | ** ** |                        | **Daniel C. Sibley** |
|                                       |       |                        | Chief Financial  Officer |
| * *                                   |       |                        | *(principal  financial and accounting officer)* |

 

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