**UNITED STATES**

**SECURITIES AND EXCHANGECOMMISSION**

**Washington, D.C. 20549**

 

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**FORM 10-Q**

 

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**QUARTERLY REPORT PURSUANT TOSECTION 13 OR 15(d) OF**

**THE SECURITIES EXCHANGE ACT OF1934**

 

**For the quarterly period endedSeptember 30, 2007**

 

**Commission File Number: 333-93399-04**

 

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**REEFGLOBAL ENERGY IV, L.P.**

(Exact name ofregistrant as specified in its charter)

 

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

 

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Indicateby check mark whether the registrant (1) has filed all reports required tobe filed by Section 13 or 15(d) of the Securities Exchange Act of 1934during the preceding 12 months (or for such shorter period that theregistrant was required to file such reports), and (2) has been subject tosuch filing requirements for the past 90 days. Yes  x    No  o

 

Indicate by check markwhether the registrant is a large accelerated filer, an accelerated filer, or anon-accelerated filer. See definition of “accelerated filer and largeaccelerated filer” in Rule 12b-2 of the Exchange Act

Large accelerated filer o                                        Accelerated filer o                                        Non-accelerated filer x

 

Indicate by check markwhether the registrant is a shell company (as defined in Rule 12b-2 of theExchange Act). Yes o    No x

 

**As ofNovember 14, 2007, the registrant had 25.028 units held by the managing generalpartner, 125.000 units of additional general partner interest and 349.972 unitsof limited partner interest outstanding.**

 

 

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

**Index**

 
| **PART I — FINANCIAL INFORMATION**                                                                |
|--------------------------------------------------------------------------------------------------------|
|                                                                                                   |
| **ITEM  1. FINANCIAL STATEMENTS (Unaudited)**                                                          |
|                                                                                                   |
| *Condensed  Balance Sheets*                                                                            |
| *Condensed  Statements of Operations*                                                                  |
| *Condensed  Statements of Cash Flows*                                                                  |
| *Notes to  Condensed Financial Statements*                                                             |
|                                                                                                   |
| **ITEM 2.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONAND 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**                                                                                         |

 

i

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**PART IFINANCIAL INFORMATION**

 

**Item 1. Financial Statements**

** **

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

**Condensed Balance Sheets**

 
| ** **                                                                    | ** ** | **September 30,** | ** **  | **December 31,** | ** ** |
|-------------------------------------------------------------------------------|------------|------------------------|-------------|-----------------------|------------|
| ** **                                                                    | ** ** | **2007**               | ** **  | **2006**              | ** ** |
| ** **                                                                    | ** ** | **(Unaudited)**        | ** **  | ** **            | ** ** |
|                                                                          |       |                   |        |                  |       |
| **Assets**                                                                    |       |                   |        |                  |       |
|                                                                          |       |                   |        |                  |       |
| **Current  assets:**                                                          |       |                   |        |                  |       |
| Cash and cash  equivalents                                                    | ** ** | **$**                  | 77,161      | ** **            | **$**      | 83,061 | ** ** |
| Accounts  receivable from affiliates                                          |       | 28,383                 |        | 27,920                |       |
| **Total  current assets**                                                     | ** ** | **105,544**            | ** **  | **110,981**           | ** ** |
|                                                                          |       |                   |        |                  |       |
| **Oil and  gas properties, full cost method of accounting:**                  |       |                   |        |                  |       |
| Proved  properties, net of accumulated depletion of $8,376,355 and $8,456,815 |       | 140,259                |        | 139,220               |       |
| Unproved  properties                                                          |       | —                 |        | 27,920                |       |
| **Net oil  and gas properties**                                               | ** ** | **140,259**            | ** **  | **167,140**           | ** ** |
| ** **                                                                    | ** ** | ** **             | ** **  | ** **            | ** ** |
| **Other  assets:**                                                            | ** ** | ** **             | ** **  | ** **            | ** ** |
| Prepaid drilling  costs                                                       | ** ** | —                 |        | 26,597                |       |
| **Total  current assets**                                                     | ** ** | **—**             | ** **  | **26,597**            | ** ** |
| ** **                                                                    | ** ** | ** **             | ** **  | ** **            | ** ** |
| **Total  assets**                                                             | ** ** | **$**                  | **245,803** | ** **            | **$**      | **304,718** | ** ** |
|                                                                          |       |                   |        |                  |       |
| **Liabilities  and partnership Equity**                                       |       |                   |        |                  |       |
|                                                                          |       |                   |        |                  |       |
| **Current  liabilities:**                                                     |       |                   |        |                  |       |
| Accounts payable                                                              | ** ** | **$**                  | 29          | ** **            | **$**      | 226 | ** ** |
| Accounts payable  to affiliates                                               |       | 1,213                  |        | 90,336                |       |
| **Total  current liabilities**                                                | ** ** | **1,242**              | ** **  | **90,562**            | ** ** |
|                                                                          |       |                   |        |                  |       |
| **Noncurrent  liabilities:**                                                  |       |                   |        |                  |       |
| Asset retirement  obligation                                                  |       | 132,132                |        | 94,718                |       |
| **Total  non-current liabilities**                                            | ** ** | **132,132**            | ** **  | **94,718**            | ** ** |
|                                                                          |       |                   |        |                  |       |
| **Partnership  Equity**                                                       |       |                   |        |                  |       |
| General partners                                                              |       | 8,254                  |        | 24,716                |       |
| Limited partners                                                              |       | 23,110                 |        | 69,198                |       |
| Managing general  partner                                                     |       | 81,065                 |        | 25,524                |       |
| **Partnership  equity**                                                       | ** ** | **112,429**            | ** **  | **119,438**           | ** ** |
| ** **                                                                    | ** ** | ** **             | ** **  | ** **            | ** ** |
| **Total  liabilities and partnership equity**                                 | ** ** | **$**                  | **245,803** | ** **            | **$**      | **304,718** | ** ** |

 

*See accompanying notes tocondensed financial statements.*

 

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

**Condensed Statements ofOperations**

 
| ** **                                  | ** ** | **For the three months ended** | ** ** | **For the nine months ended** | ** ** |
|---------------------------------------------|------------|----------------------------------------------------|------------|---------------------------------------------------|------------|
| ** **                                  | ** ** | **September 30 (unaudited)**             | ** ** | **September 30 (unaudited)**            | ** ** |
| ** **                                  | ** ** | **2007**                                           | ** ** | **2006**                                          | ** ** | **2007** | ** ** | **2006** | ** ** |
|                                        |       |                                               |       |                                              |       |   |   |   |   |
| **Revenues:**                               |       |                                               |       |                                              |       |   |   |   |   |
| Oil and gas  income                         | ** ** | **$**                                              | 60,805     | ** **                                        | **$**      | 91,828 | ** ** | **$** | 172,402 | ** ** | **$** | 243,406 | ** ** |
| **Total  revenues**                         | ** ** | **60,805**                                         | ** ** | **91,828**                                        | ** ** | **172,402** | ** ** | **243,406** | ** ** |
|                                        |       |                                               |       |                                              |       |   |   |   |   |
| **Costs  and expenses:**                    |       |                                               |       |                                              |       |   |   |   |   |
| Lease operating  expenses                   |       | 10,756                                             |       | 43,239                                            |       | 34,977 |   | 73,615 |   |
| Production taxes                            |       | 4,024                                              |       | 8,197                                             |       | 10,702 |   | 13,539 |   |
| Accretion of  asset retirement obligation   |       | 1,645                                              |       | 1,473                                             |       | 37,414 |   | 4,323 |   |
| Depreciation,  depletion and amortization   |       | 23,578                                             |       | 68,041                                            |       | 46,033 |   | 221,321 |   |
| Property  impairment                        |       | —                                             |       | 259,897                                           |       | 56,256 |   | 2,734,562 |   |
| General and  administrative                 |       | 8,100                                              |       | 13,535                                            |       | 61,931 |   | 70,553 |   |
| **Total costs  and expenses**               | ** ** | **48,103**                                         | ** ** | **394,382**                                       | ** ** | **247,313** | ** ** | **3,117,913** | ** ** |
|                                        |       |                                               |       |                                              |       |   |   |   |   |
| **Income  (loss) from operations**          | ** ** | **12,702**                                         | ** ** | **(302,554**                                      | **)**      | **(74,911** | **)** | **(2,874,507** | **)** |
|                                        |       |                                               |       |                                              |       |   |   |   |   |
| **Other  income:**                          |       |                                               |       |                                              |       |   |   |   |   |
| Interest Income                             |       | 252                                                |       | 968                                               |       | 854 |   | 6,208 |   |
| **Total  other income**                     | ** ** | **252**                                            | ** ** | **968**                                           | ** ** | **854** | ** ** | **6,208** | ** ** |
|                                        |       |                                               |       |                                              |       |   |   |   |   |
| **Net  income (loss)**                      | ** ** | **$**                                              | **12,954** | ** **                                        | **$**      | **(301,586** | **)** | **$** | **(74,057** | **)** | **$** | **(2,868,299** | **)** |
|                                        |       |                                               |       |                                              |       |   |   |   |   |
| Net income  (loss) per general partner unit |       | $                                                  | 60.30      |                                              | $          | (613.06 | ) | $ | (111.99 | ) | $ | (5,704.75 | ) |
| Net income  (loss) per limited partner unit |       | $                                                  | 60.30      |                                              | $          | (613.06 | ) | $ | (111.99 | ) | $ | (5,704.75 | ) |
| Net loss per  managing general partner unit |       | $                                                  | (626.74    | )                                                 | $          | (415.48 | ) | $ | (833.63 | ) | $ | (6,340.97 | ) |

 

*See accompanying notes tocondensed financial statements.*

 

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

**Condensed Statements of CashFlows**

 
| ** **                                                                       | ** ** | **For the nine months ended** | ** ** |
|----------------------------------------------------------------------------------|------------|---------------------------------------------------|------------|
| ** **                                                                       | ** ** | **September 30, 2007 (unaudited)** | ** ** |
| ** **                                                                       | ** ** | **2007**                                          | ** ** | **2006** | ** ** |
|                                                                             |       |                                              |       |   |   |
| **Operating  Activities**                                                        |       |                                              |       |   |   |
| Net loss                                                                         | ** ** | **$**                                             | (74,057    | ) | **$** | (2,868,299 | ) |
| Adjustments for  non-cash transactions:                                          | ** ** | ** **                                        | ** ** | ** ** | ** ** |
| Depreciation,  depletion and amortization                                        |       | 46,033                                            |       | 221,321 |   |
| Property  impairment                                                             |       | 56,256                                            |       | 2,734,562 |   |
| Accretion of  asset retirement obligation                                        |       | 37,414                                            |       | 4,323 |   |
| Adjustments to  reconcile net loss to net cash provided by operating activities: | ** ** | ** **                                        | ** ** | ** ** | ** ** |
| Decrease in  other assets                                                        |       | 26,597                                            | ** ** | **—** | ** ** |
| **Changes  in operating assets and liabilities:**                                | ** ** | ** **                                        | ** ** | ** ** | ** ** |
| Accounts  receivable                                                             |       | —                                            |       | 356 |   |
| Accounts  receivable from affiliates                                             |       | (4,731                                            | )          | (18,600 | ) |
| Accounts payable                                                                 |       | (197                                              | )          | (15,896 | ) |
| Accounts payable  to affiliates                                                  |       | (62,655                                           | )          | (6,344 | ) |
| **Net  cash provided by operating activities**                                   | ** ** | **24,660**                                        | ** ** | **51,423** | ** ** |
| ** **                                                                       | ** ** | ** **                                        | ** ** | ** ** | ** ** |
| **Investing  Activities**                                                        | ** ** | ** **                                        | ** ** | ** ** | ** ** |
| Property  acquisition and development                                            |       | (101,876                                          | )          | (605,322 | ) |
| **Net  cash used in investing activities**                                       | ** ** | **(101,876**                                      | **)**      | **(605,322** | **)** |
| ** **                                                                       | ** ** | ** **                                        | ** ** | ** ** | ** ** |
| **Financing  Activities**                                                        | ** ** | ** **                                        | ** ** | ** ** | ** ** |
| Partner capital  contributions                                                   |       | 81,266                                            |       | 13,376 |   |
| Partner  distributions                                                           |       | (9,950                                            | )          | (68,500 | ) |
| **Net  cash provided by (used in) financing activities**                         | ** ** | **71,316**                                        | ** ** | **(55,124** | **)** |
| ** **                                                                       | ** ** | ** **                                        | ** ** | ** ** | ** ** |
| **Net  decrease in cash and cash equivalents**                                   | ** ** | **(5,900**                                        | **)**      | **(609,023** | **)** |
| Cash and cash  equivalents at beginning of period                                |       | 83,061                                            |       | 757,983 |   |
| **Cash  and cash equivalents at end of period**                                  | ** ** | **$**                                             | **77,161** | ** ** | **$** | **148,960** | ** ** |
| ** **                                                                       | ** ** | ** **                                        | ** ** | ** ** | ** ** |
| Non-cash  financing transactions:                                                | ** ** | ** **                                        | ** ** | ** ** | ** ** |
| Managing partner  contributions included in accounts receivable from affiliates  | ** ** | **$**                                             | 23,652     | ** ** | **$** | 6,542 | ** ** |
| Non-cash  investing transactions:                                                | ** ** | ** **                                        | ** ** | ** ** | ** ** |
| Property  additions and asset retirement obligation                              | ** ** | **$**                                             | —     | ** ** | **$** | 1,173 | ** ** |

 

*See accompanying notes tocondensed financial statements.*

 

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

**Notes to Condensed Financial Statements(unaudited)**

**September30, 2007**

 

**1. Organization and Basis ofPresentation**

 

The financial statementsfor Reef Global Energy IV, L.P. (the Partnership) have been prepared pursuantto the rules and regulations of the Securities and Exchange Commission (SEC).Certain information and footnote disclosure normally included in annualfinancial statements prepared in accordance with accounting principlesgenerally accepted in the United States have been condensed or omitted pursuantto those rules and regulations. We have recorded all transactions andadjustments necessary to fairly present the financial statements included inthis Form 10-Q. The adjustments are normal and recurring. The following notesdescribe only the material changes in accounting policies, account details, orfinancial statement notes during the first nine months of 2007. Therefore,please read these condensed financial statements and notes to condensedfinancial statements together with the audited financial statements and notesto financial statements contained in the Partnership’s Report on Form 10-K forthe 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 areconverted to equivalent barrels at a rate of 6 Mcf to 1 Bbl. Net capitalizedcosts of crude oil and natural gas properties, as adjusted for asset retirementobligations, are limited to the lower of unamortized cost or the cost ceiling,defined as the sum of the present value of estimated future net revenues fromproved reserves based on un-escalated prices discounted at 10 percent, plus thecost of properties not being amortized, if any, plus the lower of cost orestimated fair value of unproved properties included in the costs beingamortized, if any. Pursuant to full cost accounting rules, the Partnershipperforms a ceiling test quarterly as of the balance sheet date on its provedoil and gas properties. Excess capitalized costs are charged to propertyimpairment expense. No gain or loss is recognized upon sale or disposition ofproved crude oil and natural gas properties, except in unusual circumstances.Unproved properties consist primarily of drilling costs in progress on wellsdrilling for unproved reserves. Investments in unproved properties are notdepleted pending determination of the existence of proved reserves. During thethree and nine month periods ended September 30, 2007, the Partnershiprecognized property impairment expense of $0 and $56,256.

 

**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.

 

Thefollowing table summarizes the Partnership’s asset retirement obligation forthe nine months ended September 30, 2007 and the year ended December 31, 2006.

 
| ** **                             | ** ** | **Nine months ended  September 30, 2007** | ** ** | **2006** | ** ** |
|----------------------------------------|------------|---------------------------------------------------------------|------------|----------|------------|
| Beginning asset  retirement obligation |       | $                                                             | 94,718     |     | $          | 87,725 |   |
| Additions  related to new properties   |       | —                                                        |       | 1,173    |       |
| Accretion  expense                     |       | 37,414                                                        |       | 5,820    |       |
| Ending asset  retirement obligation    |       | $                                                             | 132,132    |     | $          | 94,718 |   |

 

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**Reclassifications**

 

Certain information provided for prior years has beenreclassified to conform to the 2007 financial statement presentation.

 

**3. Transactions with Affiliates**

 

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. In lieu of the 1% obligation, Reefagreed during 2006 to pay 100% of the costs for a working interest in adevelopmental well in Louisiana. During the three and nine month periods endedSeptember 30, 2007, Reef was required to pay $23,652 and $84,280 to thePartnership in connection with these obligations. The $23,652 obligation forthe third quarter is shown in accounts receivable from affiliates on theaccompanying balance sheet. The Partnership settles its balances with Reef on aquarterly basis.

 

Reef Exploration, L.P.(RELP), an affiliate of the managing general partner, processes joint interestbillings and revenues on behalf of the Partnership. At September 30, 2007, RELPowed the Partnership $4,731 for net revenues processed by RELP in excess ofjoint interest billings paid by RELP on behalf of the Partnership. The $4,731is shown in accounts receivable from affiliates on the accompanying balancesheet. The Partnership settles its balances with RELP on a quarterly basis.

 

The Partnership has noemployees. RELP employs a staff including geologists, petroleum engineers,landmen and accounting personnel who administer all of the Partnership’soperations. The Partnership reimburses RELP for technical and administrativeservices at cost. During the three and nine month periods ended September 30,2007, the Partnership had technical services credits totaling $(677) and$(1,558), which have been capitalized as project costs, and incurred generaland administrative costs totaling $1,890 and $7,296. At September 30, 2007, thePartnership owed RELP $1,213 for technical and administrative services.

 

**4. Partnership Equity**

 

Information regarding thenumber of units outstanding and the net income (loss) per type of Partnership unitfor the three and nine month periods ended Seprember 30, 2007 is detailedbelow:

 

For the three monthsended September 30, 2007

 
| **Type of Unit**      | ** ** | **Number of  Units** | ** ** | **Net income  (loss)** | ** ** | **Net income  (loss) per  unit** | ** ** |
|---------------------------------|------------|---------------------------|------------|-----------------------------|------------|--------------------------------------------|------------|
| Managing general  partner units |       | 25.028                    |       | $                           | (15,686    | )                                          | $          | (626.74 | ) |
| General partner  units          |       | 125.000                   |       | 7,538                       |       | 60.30                                      |       |
| Limited partner  units          |       | 349.972                   |       | 21,102                      |       | 60.30                                      |       |
| Total                           |       | 500.000                   |       | $                           | 12,954     |                                       |       |   |
|                                 |            |                           |            |                             |            |                                            |            |  |  |

 

For the nine months endedSeptember 30, 2007

 
| **Type of Unit**      | ** ** | **Number of  Units** | ** ** | **Net loss** | ** ** | **Net loss per  unit** | ** ** |
|---------------------------------|------------|---------------------------|------------|-------------------|------------|----------------------------------|------------|
| Managing general  partner units |       | 25.028                    |       | $                 | (20,864    | )                                | $          | (833.63 | ) |
| General partner  units          |       | 125.000                   |       | (13,999           | )          | (111.99                          | )          |
| Limited partner  units          |       | 349.972                   |       | (39,194           | )          | (111.99                          | )          |
| Total                           |       | 500.000                   |       | $                 | (74,057    | )                                |       |   |
|                                 |            |                           |            |                   |            |                                  |            |  |  |

 

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**Item 2. Management’sDiscussion and Analysis of Financial Condition and Results of 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;

 

•                                     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 and assumptions,including, without limitation, the factors listed in the section captioned“RISK FACTORS” contained in the Program’s prospectus dated January 10, 2002 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 not occur.

 

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. The Partnership purchased working interestsin thirteen prospects with its initial capital and participated in the drillingof thirteen wells on those prospects. Seven wells were successful, of which twohave ceased production and one is currently shut-in for evaluation. Six wellswere unsuccessful. A small portion of capital was also used to purchase aroyalty interest in a field with three productive wells, one of which is stillproducing as

 

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of the date of thisreport. In addition, Reef has agreed to pay 100% of the costs for an additionalwell that is currently in progress.

 

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. The Partnershippurchased seven prospects in Louisiana, five prospects in Texas, and oneprospect in United States coastal waters in the Gulf of Mexico. The royaltypurchase is located in Louisiana, as is the well for which Reef is paying 100%of the costs. Of the Partnership’s seven successful wells, four are located inTexas and three are located in Louisiana. Of the Partnership wells stillproductive, three are in Texas, one is in Louisiana, and the shut-in well islocated in Louisiana.

 

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.

 

**Liquidity and 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. The Partnership has working capital of $104,302at September 30, 2007 from which to pay operations costs. Drilling activitieson the thirteen Partnership prospects were completed in 2006, and thePartnership has no plans to issue voluntary cash calls to partners foradditional developmental drilling on any of the prospects.

 

The total capitalinitially available to the Partnership, net of organization and offering costs,was $8,500,000. The Partnership also received $84,651 in additional capitalcontributions from Reef representing its obligation to pay for 1% of all leasehold,drilling, and completion costs. In addition, the Partnership retained theinterest income earned during 2004 and 2005 totaling $68,585 for use during thedrilling phase of operations, resulting in total funds available ofapproximately $8.653 million.

 

The Partnership purchasedinterests in thirteen prospects upon which thirteen wells were drilled. Thesewells completed drilling operations in February 2006 and all successful wellswere operational as of July 2006. The Partnership expended approximately $8.575million during the drilling phase of operations. The Partnership does notexpect to incur additional costs associated with the initial drilling of thesethirteen wells. The Partnership has also accrued approximately $132,000 as theestimated abandonment liability associated with successful wells drilled by thePartnership. The Partnership expended approximately $4.001 million inconnection with six unsuccessful wells drilled, approximately $3.938 million onseven wells completed as productive wells, $0.523 million on the purchase of aroyalty interest in a field in Louisiana, and $0.113 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 that has been drilled and is currently being side-tracked.Reef will make additional capital contributions to the Partnership, estimatedat approximately $146,000, as drilling and side-tracking costs are incurred onthis well. Approximately $104,000 of this additional amount has been paid as ofSeptember 30, 2007.

 

Our independentregistered public accounting firm’s opinion on our December 31, 2006 auditedfinancial statements included 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 which has been drilled and iscurrently being side-tracked. If successful, this well, in the opinion of themanaging general partner, has the

 

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potential to generatesignificant cash flows to the Partnership. This well completed initial drillingoperations in May 2007. After reviewing the well logs and other geologic data,a proposal to sidetrack the well approximately 2500 feet from its currentbottom hole location was made. Operations have commenced and the side-trackoperations are expected to be completed in late December 2007. Another welldrilled by the Partnership and shut-in at December 31, 2006 was re-completed ina new zone on May 11, 2007. The well produced for approximately 30 days beforehigh water volumes caused the well to be shut-in for evaluation. ThePartnership owns an 11% revenue interest in the production from this well. Atechnical review of the well has been performed and RELP, as well operator, hasproposed a new workover procedure be performed in an attempt to return the wellto production. Three of six third party investors in this well have decided notto participate in any workover attempt. At this date it is unknown if or whenthis workover procedure will be performed. A third well drilled by the Partnershipunderwent a successful workover in May 2007. A second productive zone wasperforated and the production rate from the well has increased substantially,though production has been declining from initial June 2007 production levels.As a result of this successful workover, the Partnership is currentlygenerating positive cash flow to investors. However, the long-term ability ofthe Partnership to generate revenues in excess of operating costs greatlydepends upon the success of the above drilling and side-tracking project. Ifthis project is not successful, we could be unable to fund our operating costs,which could result in ceasing our operations and liquidating the Partnership’sassets.

 

**Results of Operations**

 

**Three months ended September 30,2007 and 2006**

 

The Partnership incurreda net loss of $301,586 during the three month period ended September 30, 2006compared to net income of $12,702 for the three month period ended September30, 2007.

 

Oil and gas revenues fromsix productive working interest wells and one productive royalty interest welltotaled $91,828 during the quarter ending September 30, 2006. The Partnershiptook an impairment charge totaling $259,897 which was the result of wellperformance declines in excess of those previously anticipated on two of itssix productive working interest wells. Oil and gas revenues from fourproductive working interest wells and one productive royalty interest welltotaled $60,805 during the quarter ended September 30, 2007. Partnership oiland gas revenues were adversely impacted by the loss of production from thePartnership’s Mermentau Minerals #1 well, which, over the past year, hasundergone three workover attempts that have been only temporarily successful inmaintaining production volumes, and by the September 2006 loss of productionfrom the UPRC #1 well. These two wells accounted for $41,099, or 44.7% of theoil and gas revenues for the quarter ending September 30, 2006. During thequarter ended September 30, 2007, the State Tract 284 #1 well, which underwenta successful workover in May 2007, accounted for $41,530, or 68.3% of thePartnership’s total oil and gas sales. Three of the five producing wellsaccount for 97.1% of Partnership revenues for the quarter ended September 30,2007. General and administrative costs incurred during the fourth quartertotaled $8,100, and we anticipate similar costs during the fourth quarter.While production volumes are expected to decline, the Partnership shouldexperience a substantial benefit from the recent increase in crude oil prices.During the third quarter of 2007, crude oil accounted for 26.7% of Partnershiprevenues and natural gas accounted for 73.3% of Partnership revenues.

 

**Nine months ended September 30,2007 and 2006**

 

During the nine monthperiod ended September 30, 2006, the Partnership incurred a net loss of$2,868,299, compared to a net loss of $74,057 for the nine month period endedSeptember 30, 2007. The September 30, 2006 loss totaled $133,737 before animpairment charge of $2,734,562, while the September 30, 2007 loss totaled$17,801 before an impairment charge of $56,256. After eliminating othernon-cash charges, Partnership oil and gas revenues, net of lease operatingcosts, production taxes, and general and administrative charges totaled $85,699for the first nine months of 2006, compared to $64,792 for the first ninemonths of 2007. While the Partnership continues to operate with positive cashflow, the loss of production from the Mermentau Minerals #1 well, which hadsales revenues of $57,454 at September 30, 2006 versus $16,854 at September 30,2007, is the largest factor in the decline in operating performance. During thefourth quarter, we expect the recent significant increases in crude oil pricesto help offset continuing production declines. The well currently beingside-tracked, for which Reef is paying 100% of drilling costs, is expected toreach total depth near the end of December. If successful, the well is expectedto have a significant impact on Partnership cash flows for 2008.

 

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Net proved oil and gasreserves at September 30, 2007 and December 31, 2006 are presented below. Theestimated 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 estimateof proved reserves at September 30, 2007 uses closing NYMEX prices of $81.66 perbarrel and $6.87 per mmBtu, adjusted by property for energy content, qualityand transportation costs, compared to the December 31, 2006 estimate whichutilized closing NYMEX prices of $57.75 per barrel and $5.635 per mmBtu.

 
| **Net  proved reserves** | ** ** | **Oil (BBL)** | ** ** | **Gas (MCF)** | ** ** |
|--------------------------|------------|---------------|------------|---------------|------------|
| December 31,  2006       |       | 1,185         |       | 65,178        |       |
| September 30,  2007      |       | 2,237         |       | 53,673        |       |

 

**Item 3. Quantitativeand 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 ofits production 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.Controls and Procedures**

 

The Partnership, underthe supervision and with the participation of its management, including theprincipal executive officer and principal financial officer of the Partnership’smanaging general partner, Reef, evaluated the effectiveness of its “disclosurecontrols and procedures,” as such term is defined in Rule 13a-15(e) under theSecurities Exchange Act of 1934, as amended (Exchange Act), as of the end ofthe period covered by this quarterly report on Form 10-Q.

 

Based on that evaluation,the principal executive officer and principal financial officer of our managinggeneral partner have concluded that the Partnership’s disclosure controls andprocedures are effective  to ensure thatinformation required to be disclosed by the Partnership in reports that itfiles or submits under the Exchange Act is recorded, processed, summarized andreported within the time periods specified in SEC rules and forms, and includescontrols and procedures designed to ensure that information required to bedisclosed by us in such reports is accumulated and communicated to ourmanagement, including the principal executive officer and principal financialofficer of our managing general partner, as appropriate to allow timelydecisions regarding required disclosure. During our fiscal quarter endedSeptember 30, 2007, no changes occurred in our internal control over financialreporting (as defined in Rule 13a-15(f) under the Exchange Act) that havematerially affected, or are reasonably likely to materially affect, ourinternal control over financial reporting.

 

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**PART II – OTHER INFORMATION**

 

**Item 1. LegalProceedings**

 

None

 

**Item 1A.Risk Factors**

 

In addition to the other informationset forth in this report, you should carefully consider the risk factorsdiscussed in Part I, Item 1A in the 2006 10-K, which could materially affectour business, financial condition or future results. The risks described in our2006 10-K are not the only risks facing the Partnership. Additional risks anduncertainties not currently known to us or that we currently deem to beimmaterial also may materially adversely affect our business, financialcondition and/or operating results. There have been no material changes fromthe risk factors previously disclosed in the 2006 10-K.

 

The 2006 10-K containedthe following risk factor concerning the ability of the Partnership to continueas a going concern. This risk factor continues to be valid as of September 30,2007.

 

**ThePartnership’s ability to continue as a going concern depends upon the successof drilling and re-completion projects which will take place during 2007.**

 

Our independentregistered public accounting firm’s opinion on our December 31, 2006 auditedfinancial statements included 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 which has been drilled and iscurrently being side-tracked. If successful, this well, in the opinion of themanaging general partner, has the potential to generate significant cash flowsto the Partnership. This well completed initial drilling operations in May2007. After reviewing the well logs and other geologic data, a proposal toside-track the well approximately 2500’ from its current bottom hole locationwas made. Operations have commenced and the sidetrack operations are expectedto be completed in late December 2007. Another well drilled by the Partnershipand shut-in at December 31, 2006 was re-completed in a new zone on May 11,2007. The well produced for approximately 30 days before high water volumescaused the well to be shut-in for evaluation. The Partnership owns an 11%revenue interest in the production from this well. A technical review of thewell has been performed and RELP, as well operator, has proposed a new workoverprocedure be performed in an attempt to return the well to production. Three ofsix third party investors in this well have decided not to participate in anyworkover attempt. At this date it is unknown when or if this workover procedurewill be performed. A third well drilled by the Partnership underwent asuccessful workover in May 2007. A second productive zone was perforated andthe production rate from the well has increased substantially, thoughproduction has been declining from initial June 2007 production levels. As aresult of this successful workover, the Partnership is currently generatingpositive cash flow to investors. However, the long-term ability of thePartnership to generate revenues in excess of operating costs greatly dependsupon the success of the above drilling and side-tracking project. If thisproject is not successful, we could be unable to fund our operating costs,which could result in ceasing our operations and liquidating the Partnership’sassets.

 

**Item 2. UnregisteredSales of Equity Securities and Use 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.

 

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During the offeringperiod, the Partnership sold 474.972 units to investor partners, consisting of349.972 limited partner units and 125 general partner units. Reef purchased25.028 limited partner units, equaling 5.01% of the total Partnership unitssold. Total offering proceeds were $9,924,916. All units except those purchasedby 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 hadavailable $68,585 of interest income and $84,651 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 ofSeptember 30, 2007 the Partnership had expended $8.575 million on oil and gasoperations, and had accrued an estimated abandonment liability of approximately$132,000 in connection with successful wells drilled by the Partnership.

 

**Item 3. DefaultsUpon Senior Securities**

 

None

 

**Item 4. Submissionof Matters to a Vote of Security Holders**

 

None

 

**Item 5. OtherInformation**

 

None

 

**Item 6. 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, 2007 | By:                          | /s/ Michael J. Mauceli |
| ** **                                 |                         | **Michael J. Mauceli** |
|                                       |                         | Manager and Member |
|                                       |                         | (p*rincipal  executive officer)* |
|                                       |                         |   |
|                                       |                         |   |
| Dated:   November  14, 2007 | By:                          | /s/ Daniel C. Sibley |
| ** **                                 |                         | **Daniel C. Sibley** |
|                                       |                         | Chief Financial Officer |
|                                       |                         | (p*rincipal  financial and accounting officer)* |

 

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