1 of 20
                                 FORM 10-Q


                    SECURITIES AND EXCHANGE COMMISSION
                         WASHINGTON, D. C.  20549

(Mark One)

(X)  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2004

                                    OR

( )  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934

For the transition period from _________________ to _______________

Commission file number 0-16494

        Southwest Royalties Institutional Income Fund VIII-B, L.P.
                  (Exact name of registrant as specified
                   in its limited partnership agreement)

Delaware                                          75-2220418
(State or other jurisdiction of                                  (I.R.S.
Employer
incorporation or organization)
          Identification No.)

                         6 Desta Drive, Suite 6500
                           Midland, Texas 79705
                 (Address of principal executive offices)

                               432-682-6324
                      (Registrant's telephone number,
                           including area code)

Indicate  by  check  mark  whether registrant (1)  has  filed  all  reports
required to be filed by Section 13 or 15(d) of the Securities Exchange  Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject  to
such filing requirements for the past 90 days:

                              Yes X No ___

Indicate  by check mark whether the registrant is an accelerated filer  (as
defined in Exchange Act Rule 12b-2).     Yes     No  X

The  registrant's  outstanding  securities  consist  of  Units  of  limited
partnership  interests for which there exists no established public  market
from which to base a calculation of aggregate market value.

         The total number of pages contained in this report is 23.


Glossary of Oil and Gas Terms
The  following are abbreviations and definitions of terms commonly used  in
the  oil  and  gas industry that are used in this filing.  All  volumes  of
natural gas referred to herein are stated at the legal pressure base to the
state  or area where the reserves exit and at 60 degrees Fahrenheit and  in
most instances are rounded to the nearest major multiple.

     Bbl. One stock tank barrel, or 42 United States gallons liquid volume.

     Developmental well. A well drilled within the proved area of an oil or
natural gas reservoir to the depth of a stratigraphic horizon known  to  be
productive.

     Exploratory well. A well drilled to find and produce oil or gas in  an
unproved  area to find a new reservoir in a field previously  found  to  be
productive of oil or natural gas in another reservoir or to extend a  known
reservoir.

     Farm-out  arrangement. An agreement whereby the owner of the leasehold
or  working  interest  agrees to assign his interest  in  certain  specific
acreage  to  the assignee, retaining some interest, such as  an  overriding
royalty interest, subject to the drilling of one (1) or more wells or other
performance by the assignee.

     Field. An area consisting of a single reservoir or multiple reservoirs
all  grouped  on  or  related to the same individual geological  structural
feature and/or stratigraphic condition.

     Mcf. One thousand cubic feet.

     Net  Profits  Interest.  An agreement whereby  the  owner  receives  a
specified  percentage of the defined net profits from a producing  property
in  exchange for consideration paid.  The net profits interest  owner  will
not otherwise participate in additional costs and expenses of the property.

     Oil. Crude oil, condensate and natural gas liquids.

     Overriding  royalty  interest. Interests that  are  carved  out  of  a
working  interest, and their duration is limited by the term of  the  lease
under which they are created.

     Present  value  and  PV-10 Value. When used with respect  to  oil  and
natural gas reserves, the estimated future net revenue to be generated from
the  production of proved reserves, determined in all material respects  in
accordance  with  the  rules and regulations of the  SEC  (generally  using
prices  and costs in effect as of the date indicated) without giving effect
to  non-property  related  expenses  such  as  general  and  administrative
expenses,  debt service and future income tax expenses or to  depreciation,
depletion  and  amortization, discounted using an annual discount  rate  of
10%.

     Production  costs.  Costs incurred to operate and maintain  wells  and
related  equipment  and facilities, including depreciation  and  applicable
operating  costs  of support equipment and facilities and  other  costs  of
operating and maintaining those wells and related equipment and facilities.

     Proved Area. The part of a property to which proved reserves have been
specifically attributed.

     Proved  developed oil and gas reserves. Proved developed oil  and  gas
reserves  are  reserves that can be expected to be recovered from  existing
wells with existing equipment and operating methods.

     Proved properties. Properties with proved reserves.

     Proved  reserves. The estimated quantities of crude oil, natural  gas,
and  natural  gas liquids that geological and engineering data  demonstrate
with  reasonable  certainty to be recoverable in future  years  from  known
reservoirs under existing economic and operating conditions.

     Proved  undeveloped reserves. Proved undeveloped oil and gas  reserves
are  reserves that are expected to be recovered from new wells on undrilled
acreage,  or  from existing wells where a relatively major  expenditure  is
required for recompletion.

     Reservoir.  A porous and permeable underground formation containing  a
natural  accumulation  of  producible  oil  or  gas  that  is  confined  by
impermeable  rock  or water barriers and is individual  and  separate  from
other reservoirs.

     Royalty  interest.  An  interest in an oil and  natural  gas  property
entitling  the  owner to a share of oil or natural gas production  free  of
costs of production.

     Working  interest.  The operating interest that gives  the  owner  the
right  to  drill, produce and conduct operating activities on the  property
and a share of production.

     Workover.  Operations  on  a producing well  to  restore  or  increase
production.




                      PART I. - FINANCIAL INFORMATION

Item 1.  Financial Statements

The  unaudited  condensed financial statements included  herein  have  been
prepared  by  the Registrant (herein also referred to as the "Partnership")
in  accordance  with generally accepted accounting principles  for  interim
financial information and with the instructions to Form 10-Q and Rule 10-01
of Regulation S-X.  Accordingly, they do not include all of the information
and  footnotes  required  by generally accepted accounting  principles  for
complete   financial  statements.   In  the  opinion  of  management,   all
adjustments necessary for a fair presentation have been included and are of
a  normal  recurring nature.  The financial statements should  be  read  in
conjunction with the audited financial statements and the notes thereto for
the  year ended December 31, 2003, which are found in the Registrant's Form
10-K  Report  for  2003 filed with the Securities and Exchange  Commission.
The December 31, 2003 balance sheet included herein has been taken from the
Registrant's  2003 Form 10-K Report.  Operating results for the  three  and
nine-month  periods ended September 30, 2004 are not necessarily indicative
of the results that may be expected for the full year.



        Southwest Royalties Institutional Income Fund VIII-B, L.P.
                              Balance Sheets

                                 Septembe  December
                                  r 30,      31,
                                   2004      2003
                                  ------    ------
                                 (unaudit
                                   ed)
Assets
----------

Current assets:
 Cash and cash equivalents    $  158,385   103,986
  Receivable  from  Managing     191,442   113,799
General Partner
                                 --------  --------
                                 ----      ----
   Total current assets          349,827   217,785
                                 --------  --------
                                 ----      ----
Oil  and  gas  properties  -
using the full-
 cost method of accounting       4,071,01  4,071,01
                                 3         3
       Less      accumulated
depreciation,
         depletion       and     3,734,38  3,722,67
amortization                     9         7
                                 --------  --------
                                 ----      ----
      Net   oil   and    gas     336,624   348,336
properties
                                 --------  --------
                                 ----      ----
                              $  686,451   566,121
                                 =======   =======
Liabilities  and   Partners'
Equity
----------------------------
------------

Current     liability      -  $  372       224
distributions payable
                                 --------  --------
                                 ----      ----

Asset retirement obligation      169,545   159,948
                                 --------  --------
                                 ----      ----
Partners' equity:
 General partner                 13,585    1,355
 Limited partners                502,949   404,594
                                 --------  --------
                                 ----      ----
   Total partners' equity        516,534   405,949
                                 --------  --------
                                 ----      ----
                              $  686,451   566,121
                                 =======   =======


        Southwest Royalties Institutional Income Fund VIII-B, L.P.
                         Statements of Operations
                                (unaudited)

                                 Three Months Ended   Nine Months Ended
                                    September 30,       September 30,
                                   2004      2003      2004      2003
                                   -----     -----     -----     -----
Revenues
-------------
Income from net profits        $ 236,991   182,815   749,144   577,002
interests
Interest                         303       401       808       1,084
Other                            -         1         596       -
                                 --------  --------  --------  --------
                                 --        --        --        --
                                 237,294   183,217   750,548   578,086
                                 --------  --------  --------  --------
                                 --        --        --        --
Expenses
------------
General and administrative       22,373    21,634    68,654    68,316
Depreciation, depletion and      3,712     5,000     11,712    18,600
amortization
Accretion of asset retirement    3,199     2,962     9,597     10,403
obligation
                                 --------  --------  --------  --------
                                 --        --        --        --
                                 29,284    29,596    89,963    97,319
                                 --------  --------  --------  --------
                                 --        --        --        --
Net income from continuing       208,010   153,621   660,585   480,767
operations

Results from discontinued
operations -
 sale of oil and gas leases -    -         61        -         11,801
See Note 4
                                 --------  --------  --------  --------
                                 --        --        --        --
Net income before cumulative     208,010   153,682   660,585   492,568
effect

Cumulative effect of change in
accounting
 principle - SFAS No. 143 -      -         -         -         (84,885)
See Note 3
                                 --------  --------  --------  --------
                                 --        --        --        --
Net income                     $ 208,010   153,682   660,585   407,683
                                 ======    ======    ======    ======
Net income allocated to:
 Managing General Partner      $ 21,172    15,868    67,230    42,668
                                 ======    ======    ======    ======
 Limited Partners              $ 186,838   137,814   593,355   365,015
                                 ======    ======    ======    ======
  Per limited partner unit
before discontinued
   operations and cumulative   $  18.41
effect                                     13.57     58.48     42.45
  Discontinued operations per         -         .01       -
limited partner unit                                           1.05
  Cumulative effects per              -         -          -    (7.53)
limited partner unit
                                 --------  --------  --------  --------
                                 --        --        --        --
  Per limited partner unit     $  18.41
                                           13.58     58.48     35.97
                                 ======    ======    ======    ======

         Southwest Royalties Institutional Income Fund VIII-B, L.P.
                         Statements of Cash Flows
                                (unaudited)

                                    Nine Month Ended
                                     September 30,
                                     2004      2003
                                    -----     -----
Cash flows from operating
activities
 Cash received from income from
net
  profits interests              $ 647,947   563,667
 Net cash received from            -         12,201
discontinued operations
 Cash paid to suppliers            (45,100   (37,377
                                   )         )
 Interest received                 808       1,084
 Other                             596       -
                                   -------   -------
                                   ---       ---
  Net cash provided by operating   604,251   539,575
activities
                                   -------   -------
                                   ---       ---
Cash flows from investing
activities
 Sale of oil and gas properties    -         63,787
                                   -------   -------
                                   ---       ---
Cash flows used in financing
activities
 Distributions to partners         (549,85   (519,03
                                   2)        7)
                                   -------   -------
                                   ---       ---
  Net increase in cash and cash    54,399    84,325
equivalents

 Beginning of period               103,986   79,078
                                   -------   -------
                                   ---       ---
 End of period                   $ 158,385   163,403
                                   ======    ======
Reconciliation of net income to
net cash
 provided by operating
activities

Net income                       $ 660,585   407,683

Adjustments to reconcile net
income to net
 cash provided by operating
activities
 Depreciation, depletion and       11,712    18,600
amortization
 Accretion of asset retirement     9,597     10,403
obligation
 Cumulative effect of change in
accounting
  principle - SFAS No. 143         -         84,885
 Increase in receivables           (101,19   (13,335
                                   7)        )
 Increase in payables              23,554    31,339
                                   -------   -------
                                   ---       ---
Net cash provided by operating   $ 604,251   539,575
activities
                                   ======    ======
Noncash investing and financing
activities:

 Increase in oil and gas
properties - Adoption
  of SFAS No. 143                $ -         139,086
                                   ======    ======
 Decrease in oil and gas
properties - SFAS No. 143
  sale of property               $ -         77,435
                                   ======    ======
 Increase in oil and gas
properties - SFAS No. 143
  Addition of well due to        $ -         47
farmout arrangement
                                   ======    ======
        Southwest Royalties Institutional Income Fund VIII-B, L.P.
                     (a Delaware limited partnership)

                      Notes to Financial Statements

1.   Organization
     Southwest  Royalties  Institutional  Income  Fund  VIII-B,  L.P.   was
     organized  under  the laws of the state of Delaware  on  November  30,
     1987,  for  the purpose of acquiring producing oil and gas  properties
     and to produce and market crude oil and natural gas produced from such
     properties  for a term of 50 years, unless terminated  at  an  earlier
     date  as  provided for in the Partnership Agreement.  The offering  of
     limited   partner   units  began  March  31,  1988,  minimum   capital
     requirements  were met July 11, 1988, with the offering  concluded  on
     March 31, 1989.  The Partnership sells its oil and gas production to a
     variety of purchasers with the prices it receives being dependent upon
     the  oil  and  gas economy.  Southwest Royalties, Inc. a wholly  owned
     subsidiary  of Clayton Williams Energy, Inc., serves as  the  Managing
     General  Partner.   Revenues,  costs and  expenses  are  allocated  as
     follows:
                              Limited   General
                              Partners  Partners
                              --------  --------
Interest  income on  capital  100%      -
contributions
Oil  and gas sales from  net  90%       10%
profits interests
All other revenues            90%       10%
Organization  and   offering  100%      -
costs (1)
Amortization of organization  100%      -
costs
Property acquisition costs    100%      -
Gain/loss    on     property  90%        10%
dispositions
Operating and administrative  90%       10%
costs (2)
Depreciation, depletion  and
amortization
 of oil and gas properties    100%      -
All other costs               90%       10%

          (1)   All  organization costs in excess of 3% of initial  capital
          contributions  will be paid by the Managing General  Partner  and
          will  be treated as a capital contribution.  The Partnership paid
          the  Managing  General Partner an amount equal to 3%  of  initial
          capital contributions for such organization costs.

          (2)   Administrative costs in any year which exceed 2% of capital
          contributions shall be paid by the Managing Partner and  will  be
          treated as a capital contribution.

2.   Summary of Significant Accounting Policies
     The  interim financial information as of September 30, 2004,  and  for
     the  three  and  nine months ended September 30, 2004,  is  unaudited.
     Certain  information  and footnote disclosures  normally  included  in
     financial  statements prepared in accordance with  generally  accepted
     accounting principles have been condensed or omitted in this Form 10-Q
     pursuant  to the rules and regulations of the Securities and  Exchange
     Commission.  However,  in  the opinion of  management,  these  interim
     financial  statements include all the necessary adjustments to  fairly
     present  the  results of the interim periods and all such  adjustments
     are  of a normal recurring nature.  The interim consolidated financial
     statements should be read in conjunction with the Partnership's Annual
     Report on Form 10-K for the year ended December 31, 2003.

        Southwest Royalties Institutional Income Fund VIII-B, L.P.
                     (a Delaware limited partnership)

                      Notes to Financial Statements

3.   Cumulative effect of change in accounting principle - SFAS No. 143
     On  January  1, 2003, the Partnership adopted Statement  of  Financial
     Accounting   Standards  No.  143,  Accounting  for  Asset   Retirement
     Obligations  ("SFAS No. 143").  Adoption of SFAS No. 143  is  required
     for  all  companies with fiscal years beginning after June  15,  2002.
     The new standard requires the Partnership to recognize a liability for
     the  present  value  of  all  legal obligations  associated  with  the
     retirement  of tangible long-lived assets and to capitalize  an  equal
     amount as a cost of the asset and depreciate the additional cost  over
     the  estimated  useful  life of the asset.  On January  1,  2003,  the
     Partnership    recorded   additional   costs,   net   of   accumulated
     depreciation,  of  approximately $139,086, a long  term  liability  of
     approximately  $223,971 and a loss of approximately  $84,885  for  the
     cumulative  effect  on  depreciation  of  the  additional  costs   and
     accretion  expense  on  the liability related to expected  abandonment
     costs  of  its oil and natural gas producing properties.  At September
     30,  2004, the asset retirement obligation was $169,545.  The increase
     in  the  balance from January 1, 2004 is due to accretion  expense  of
     $9,597.

4.   Discontinued Operations - Sale of oil and gas leases
     During the three months ended June 30, 2003, the Partnership sold  its
     interest in certain oil, gas and salt water disposal wells for $63,787
     sales  proceeds  and  retired $77,435 of asset  retirement  obligation
     associated  with the properties.  Since the Partnership is  under  the
     full  cost  pool  method of accounting, the sales proceeds  and  asset
     retirement  obligation liability were taken against the  oil  and  gas
     properties  asset account and therefore, no gain or loss was  recorded
     and  shown  on the statement of operations as part of the discontinued
     operations.   Pursuant  to  the requirements  of  SFAS  No.  144,  the
     historical operating results from these properties have been  reported
     as   discontinued  operations  in  the  accompanying   statements   of
     operations.    The  following  table  summarizes  certain   historical
     operating information related to the discontinued operations:

                                   Three      Nine
                                  months     months
                                   ended      ended
                                  September 30, 2003

         Income from net profit  $          $
         interest                61         11,801

5.   Change in Control of Managing General Partner
     On  May  21,  2004,  Clayton Williams Energy, Inc.  acquired  all  the
     outstanding common stock of Southwest Royalties Inc. through a merger.
     Clayton  Williams  Energy,  Inc. paid  $57.1  million  to  holders  of
     Southwest  Royalties,  Inc.  common stock and  common  stock  warrants
     ($45.01   per   share)   and  assumed  and  refinanced   approximately
     $113.9 million of assumed bank debt at closing.


Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations

General
Southwest Royalties Institutional Income Fund VIII-B, L.P. was organized as
a  Delaware limited partnership on November 30, 1987. The offering of  such
limited  partnership  interests  began  March  31,  1988,  minimum  capital
requirements were met July 11, 1988, and concluded on March 31,  1989  with
total limited partner contributions of $5,073,500.

The Partnership was formed to acquire royalty and net profits interests  in
producing  oil  and  gas properties, to produce and market  crude  oil  and
natural  gas  produced  from such properties, and  to  distribute  the  net
proceeds from operations to the limited and general partners.  Net revenues
from  producing  oil  and gas properties will not be  reinvested  in  other
revenue  producing  assets except to the extent that production  facilities
and wells are improved or reworked or where methods are employed to improve
or  enable  more efficient recovery of oil and gas reserves.  The  economic
life  of  the  Partnership  thus  depends on  the  period  over  which  the
Partnership's oil and gas reserves are economically recoverable.

Increases   or   decreases   in  Partnership   revenues   and,   therefore,
distributions  to partners will depend primarily on changes in  the  prices
received  for  production,  changes in volumes of  production  sold,  lease
operating  expenses, enhanced recovery projects, offset drilling activities
pursuant to farmout arrangements, sales of properties, and the depletion of
wells.  Since wells deplete over time, production can generally be expected
to decline from year to year.

Well  operating costs and general and administrative costs usually decrease
with   production   declines;  however,  these  costs  may   not   decrease
proportionately.  Net income available for distribution to the partners  is
therefore expected to fluctuate in later years based on these factors.

Oil and Gas Properties

Oil  and  gas  properties  are accounted for at cost  under  the  full-cost
method.  Under this method, all productive and nonproductive costs incurred
in  connection with the acquisition, exploration and development of oil and
gas  reserves  are capitalized.  Gain or loss on the sale of  oil  and  gas
properties  is not recognized unless significant oil and gas  reserves  are
sold.

Should the net capitalized costs exceed the estimated present value of  oil
and gas reserves, discounted at 10%, such excess costs would be charged  to
current  expense.  As of September 30, 2004, the net capitalized costs  did
not exceed the estimated present value of oil and gas reserves.


The  Partnership's  interest  in oil and gas  properties  consists  of  net
profits  interests  in  proved properties located  within  the  continental
United  States.   A net profits interest is created when  the  owner  of  a
working  interest in a property enters into an arrangement  providing  that
the  net profits interest owner will receive a stated percentage of the net
profit  from  the  property.   The  net profits  interest  owner  will  not
otherwise participate in additional costs and expenses of the property.

The  Partnership recognizes income from its net profits interest in oil and
gas property on an accrual basis, while the quarterly cash distributions of
the net profits interest are based on a calculation of actual cash received
from  oil  and  gas sales, net of expenses incurred during  that  quarterly
period.   If  the  net  profits interest calculation  results  in  expenses
incurred  exceeding the oil and gas income received during  a  quarter,  no
cash  distribution is due to the Partnership's net profits  interest  until
the  deficit is recovered from future net profits.  The Partnership accrues
a quarterly loss on its net profits interest provided there is a cumulative
net  amount  due for accrued revenue as of the balance sheet date.   As  of
September 30, 2004, there were no timing differences, which resulted  in  a
deficit net profit interest.

Critical Accounting Policies

The  Partnership follows the full cost method of accounting for its oil and
gas  properties.   The  full cost method subjects  companies  to  quarterly
calculations of a "ceiling", or limitation on the amount of properties that
can  be capitalized on the balance sheet.  If the Partnership's capitalized
costs  are in excess of the calculated ceiling, the excess must be  written
off as an expense.

The  Partnership's discounted present value of its proved oil  and  natural
gas  reserves  is  a  major  component  of  the  ceiling  calculation,  and
represents  the  component  that requires the  most  subjective  judgments.
Estimates  of  reserves are forecasts based on engineering data,  projected
future  rates  of  production and the timing of future  expenditures.   The
process  of  estimating oil and natural gas reserves  requires  substantial
judgment,  resulting  in  imprecise determinations,  particularly  for  new
discoveries.   Different reserve engineers may make different estimates  of
reserve  quantities  based  on the same data.   The  Partnership's  reserve
estimates are prepared by outside consultants.  Quarterly reserve estimates
are prepared by the Managing General Partner's internal staff of engineers.

The  passage  of  time  provides  more  qualitative  information  regarding
estimates of reserves, and revisions are made to prior estimates to reflect
updated  information.   However,  there  can  be  no  assurance  that  more
significant  revisions  will not be necessary in  the  future.   If  future
significant  revisions  are  necessary  that  reduce  previously  estimated
reserve quantities, it could result in a full cost property writedown.   In
addition to the impact of these estimates of proved reserves on calculation
of  the  ceiling,  estimates  of proved reserves  are  also  a  significant
component of the calculation of DD&A.

While  the quantities of proved reserves require substantial judgment,  the
associated prices of oil and natural gas reserves that are included in  the
discounted  present  value of the reserves do not  require  judgment.   The
ceiling calculation dictates that prices and costs in effect as of the last
day  of  the  period are generally held constant indefinitely. Because  the
ceiling  calculation dictates that prices in effect as of the last  day  of
the  applicable quarter are held constant indefinitely, the resulting value
is  not indicative of the true fair value of the reserves.  Oil and natural
gas  prices have historically been cyclical and, on any particular  day  at
the  end of a quarter, can be either substantially higher or lower than the
Partnership's  long-term price forecast that is a barometer for  true  fair
value.

Results of Operations

A.  General Comparison of the Quarters Ended September 30, 2004 and 2003

The  following  table  provides certain information  regarding  performance
factors for the quarters ended September 30, 2004 and 2003:

                                    Three Months
                                       Ended         Percenta
                                                        ge
                                   September 30,     Increase
                                   2004      2003    (Decreas
                                                        e)
                                  -----     -----    --------
                                                        --
Average price per barrel  of  $   41.88              43%
oil                                        29.23
Average price per mcf of gas  $    5.65              22%
                                           4.63
Oil production in barrels        8,778     9,500     (8%)
Gas production in mcf            8,131     8,600     (5%)
Income   from  net   profits  $  236,991   182,815   30%
interests
Partnership distributions     $  200,000   213,718   (6%)
Limited              partner  $  180,000   193,718   (7%)
distributions
Per  unit  distribution   to
limited
 partners                     $   17.74              (7%)
                                           19.09
Number  of  limited  partner     10,147    10,147
units

Revenues

The  Partnership's income from net profits interests increased to  $236,991
from  $182,815  for  the  quarters  ended  September  30,  2004  and  2003,
respectively,  an  increase of 30%.  The principal  factors  affecting  the
comparison  of  the  quarters ended September 30,  2004  and  2003  are  as
follows:

1.   The  average  price  for a barrel of oil received by  the  Partnership
     increased  during the quarter ended September 30, 2004 as compared  to
     the  quarter  ended September 30, 2003 by 43%, or $12.66  per  barrel,
     resulting in an increase of approximately $111,100 in income from  net
     profits  interests.  Oil sales represented 89% of total  oil  and  gas
     sales  during the quarter ended September 30, 2004 as compared to  87%
     during the quarter ended September 30, 2003.

     The  average  price  for  an mcf of gas received  by  the  Partnership
     increased  during the same period by 22%, or $1.02 per mcf,  resulting
     in  an  increase  of approximately $8,300 in income from  net  profits
     interests.

     The  total  increase in income from net profits interests due  to  the
     change in prices received from oil and gas production is approximately
     $119,400.   The  market  price  for oil and  gas  has  been  extremely
     volatile over the past decade, and management expects a certain amount
     of volatility to continue in the foreseeable future.


2. Oil  production  decreased approximately 722 barrels or  8%  during  the
   quarter  ended  September  30, 2004 as compared  to  the  quarter  ended
   September 30, 2003, resulting in a decrease of approximately $21,100  in
   income from net profits interests.

    Gas  production decreased approximately 469 mcf or 5% during  the  same
    period, resulting in a decrease of approximately $2,200 in income  from
    net profits interests.

    The  total  decrease in income from net profits interests  due  to  the
    change in production is approximately $23,300.

3. Lease  operating  costs  and  production  taxes  were  31%  higher,   or
   approximately $41,900 more during the quarter ended September  30,  2004
   as  compared  to the quarter ended September 30, 2003.  The increase  in
   lease  operating costs is due to surface repairs and well  work  on  one
   property  and  surface  repairs on another  property.   An  increase  in
   production taxes is the result of higher oil and gas prices.

Costs and Expenses

Total costs and expenses decreased to $29,284 from $29,596 for the quarters
ended  September 30, 2004 and 2003, respectively, a decrease  of  1%.   The
decrease is the result of lower depletion expense, partially offset  by  an
increase in general and administrative expense and accretion expense.

1.  General and administrative costs consists of independent accounting and
    engineering  fees,  computer services, postage,  and  Managing  General
    Partner personnel costs.  General and administrative costs increased 3%
    or  approximately $700 during the quarter ended September 30,  2004  as
    compared to the quarter ended September 30, 2003.

2.  Depletion  expense decreased to $3,712 for the quarter ended  September
    30,  2004  from $5,000 for the same period in 2003.  This represents  a
    decrease  of 26%.  The contributing factor to the decrease in depletion
    expense is in relation to the BOE depletion rate for the quarter  ended
    September 30, 2004, which was $.37 applied to 10,133 BOE as compared to
    $.46  applied  to  10,933 BOE for the same period in 2003.   The  lower
    depreciation  rate  in 2004 is due to the upward  revision  in  reserve
    estimates resulting from higher oil and gas prices.

3.  Accretion  expense increased to $3,199 for the quarter ended  September
    30,  2004 from $2,962 for the same period in 2003.  This represents  an
    increase of 8%.


B.   General Comparison of the Nine-Month Periods Ended September 30,  2004
and 2003

The  following  table  provides certain information  regarding  performance
factors for the nine-month periods ended September 30, 2004 and 2003:

                                    Nine Months
                                       Ended         Percenta
                                                        ge
                                   September 30,     Increase
                                   2004      2003    (Decreas
                                                        e)
                                  -----     -----    --------
                                                        --
Average price per barrel  of  $    38.19             29%
oil                                        29.71
Average price per mcf of gas  $     5.61             9%
                                           5.13
Oil production in barrels        27,128    28,963    (6%)
Gas production in mcf            25,881    26,500    (2%)
Income   from  net   profits  $  749,144   577,002   30%
interests
Partnership distributions     $  550,000   518,718   6%
Limited              partner  $  495,000   468,218   6%
distributions
Per  unit  distribution   to
limited
 partners                     $    48.78             6%
                                           46.14
Number  of  limited  partner     10,147    10,147
units

Revenues

The  Partnership's income from net profits interests increased to  $749,144
from  $577,002  for  the nine months ended September  30,  2004  and  2003,
respectively,  an  increase of 30%.  The principal  factors  affecting  the
comparison  of  the nine months ended September 30, 2004 and  2003  are  as
follows:

1.  The  average  price  for a barrel of oil received  by  the  Partnership
    increased  during the nine months ended September 30, 2004 as  compared
    to  the  nine  months ended September 30, 2003 by  29%,  or  $8.48  per
    barrel,  resulting in an increase of approximately $230,000  in  income
    from net profits interests.  Oil sales represented 88% of total oil and
    gas  sales during the nine months ended September 30, 2004 as  compared
    to 86% during the nine months ended September 30, 2003.

    The  average  price  for  an  mcf of gas received  by  the  Partnership
    increased  during the same period by 9%, or $.48 per mcf, resulting  in
    an  increase  of  approximately $12,500  in  income  from  net  profits
    interests.

    The  total  increase in income from net profits interests  due  to  the
    change  in prices received from oil and gas production is approximately
    $242,500.  The market price for oil and gas has been extremely volatile
    over  the  past  decade, and management expects  a  certain  amount  of
    volatility to continue in the foreseeable future.


2. Oil  production decreased approximately 1,835 barrels or 6%  during  the
   nine  months  ended September 30, 2004 as compared to  the  nine  months
   ended  September  30,  2003,  resulting in a decrease  of  approximately
   $54,500 in income from net profits interests.

    Gas  production decreased approximately 619 mcf or 2% during  the  same
    period, resulting in a decrease of approximately $3,200 in income  from
    net profits interests.

    The  total  decrease in income from net profits interests  due  to  the
    change in production is approximately $57,700.

3.  Lease  operating  costs  and  production  taxes  were  3%  higher,   or
    approximately  $12,600 more during the nine months ended September  30,
    2004 as compared to the nine months ended September 30, 2003.

Costs and Expenses

Total  costs  and expenses decreased to $89,963 from $97,319 for  the  nine
months  ended September 30, 2004 and 2003, respectively, a decrease of  8%.
The  decrease  is  the  result  of lower accretion  expense  and  depletion
expense,  partially  offset  by an increase in general  and  administrative
expense.

1.  General and administrative costs consists of independent accounting and
    engineering  fees,  computer services, postage,  and  Managing  General
    Partner  personnel costs.  General and administrative  costs  increased
    less  than  1%  or  approximately $300 during  the  nine  months  ended
    September  30, 2004 as compared to the nine months ended September  30,
    2003.

2.  Depletion  expense  decreased to $11,712  for  the  nine  months  ended
    September  30,  2004 from $18,600 for the same period  in  2003.   This
    represents a decrease of 37%.  The contributing factor to the  decrease
    in  depletion expense is in relation to the BOE depletion rate for  the
    nine  months ended September 30, 2004, which was $.37 applied to 31,442
    BOE  as  compared to $.56 applied to 33,380 BOE for the same period  in
    2003.   The  lower  depreciation rate in 2004  is  due  to  the  upward
    revision in reserve estimates resulting from higher oil and gas prices.

3.  Accretion  expense  decreased  to $9,597  for  the  nine  months  ended
    September  30,  2004 from $10,403 for the same period  in  2004.   This
    represents a decrease of 8%.


Liquidity and Capital Resources

The  primary source of cash is from operations, the receipt of income  from
interests in oil and gas properties.  The Partnership knows of no  material
change, nor does it anticipate any such change.

Cash flows provided by operating activities were approximately $604,300  in
the  nine  months  ended  September 30, 2004 as compared  to  approximately
$539,600 in the nine months ended September 30, 2003.

There  were  no  cash flows used in investing activities  during  the  nine
months  ended  September  30,  2004.   Cash  flows  provided  by  investing
activities  were  approximately $63,800 in the nine months ended  September
30, 2003.

Cash flows used in financing activities were approximately $549,900 in  the
nine  months ended September 30, 2004 as compared to approximately $519,000
in  the  nine  months ended September 30, 2003.  The only use in  financing
activities was the distributions to partners.

Total  distributions during the nine months ended September 30,  2004  were
$550,000  of  which  $495,000 was distributed to the limited  partners  and
$55,000  to  the  general partners.  The per unit distribution  to  limited
partners during the nine months ended September 30, 2004 was $48.78.  Total
distributions during the nine months ended September 30, 2003 were $518,718
of  which  $468,218 was distributed to the limited partners and $50,500  to
the general partners.  The per unit distribution to limited partners during
the nine months ended September 30, 2003 was $46.14.

The  sources  for  the  2004 distributions of $550,000  were  oil  and  gas
operations  of  approximately  $604,300,  resulting  in  excess  cash   for
contingencies  or  subsequent  distributions.   The  source  for  the  2003
distributions  of  $518,718  was oil and gas  operations  of  approximately
$539,600,  the  change  in oil and gas property of  approximately  $63,800,
resulting in excess cash for contingencies or subsequent distributions.

Cumulative cash distributions of $8,457,287 have been made to the partners.
As  of  September 30, 2004, $7,633,521 or $752.29 per limited partner  unit
has been distributed to the limited partners, representing a 100% return of
the capital and 50% return on capital contributed.

As  of  September 30, 2004, the Partnership had approximately  $349,500  in
working  capital.   The  Managing  General  Partner  knows  of  no  unusual
contractual  commitments.  The partnership held many long-lived  properties
at  inception,  however  due to the restrictions  on  property  development
imposed  by  the partnership agreement, the Partnership cannot develop  its
non  producing  properties.  Without continued development,  the  producing
reserves continue to deplete.  Accordingly, as the Partnership's properties
have  matured  and  depleted, the net cash flows from  operations  for  the
partnership  has  steadily  declined, except in  periods  of  substantially
increased  commodity pricing.  Maintenance of properties and administrative
expenses for the Partnership are increasing relative to production.  As the
properties   continue   to   deplete,   maintenance   of   properties   and
administrative costs as a percentage of production are expected to continue
to increase.

Managing General Partner

On May 21, 2004, Clayton Williams Energy, Inc. acquired all the outstanding
common  stock  of  Southwest  Royalties Inc.  through  a  merger.   Clayton
Williams Energy, Inc. paid $57.1 million to holders of Southwest Royalties,
Inc.  common stock and common stock warrants ($45.01 per share) and assumed
and  refinanced  approximately  $113.9 million  of  assumed  bank  debt  at
closing.



Item 3.   Quantitative and Qualitative Disclosures About Market Risk

The  Partnership  is  not a party to any derivative or embedded  derivative
instruments.

Item 4.   Controls and Procedures

Disclosure Controls and Procedures
As  of  the nine months ended September 30, 2004, L. Paul Latham, President
and  Chief  Executive Officer of the Managing General Partner, and  Mel  G.
Riggs,  Vice President and Chief Financial Officer of the Managing  General
Partner,  evaluated  the  effectiveness  of  the  Partnership's  disclosure
controls and procedures.  Based on their evaluation, they believe that:

     The  disclosure  controls  and  procedures  of  the  Partnership  were
     effective in ensuring that information required to be disclosed by the
     Partnership in the reports it files or submits under the Exchange  Act
     was  recorded,  processed,  summarized and reported  within  the  time
     periods specified in the SEC's rules and forms; and

     The  disclosure  controls  and  procedures  of  the  Partnership  were
     effective  in  ensuring  that  material  information  required  to  be
     disclosed by the Partnership in the report it filed or submitted under
     the  Exchange  Act was accumulated and communicated  to  the  Managing
     General  Partner's  management, including its Chief Executive  Officer
     and  Chief Financial Officer, as appropriate to allow timely decisions
     regarding required disclosure.

Internal Control Over Financial Reporting
There  has  not been any change in the Partnership's internal control  over
financial  reporting that occurred during the nine months  ended  September
30,  2004  that  has  materially  affected,  or  is  reasonably  likely  to
materially affect, internal control over financial reporting.


                        PART II - OTHER INFORMATION


Item 1.  Legal Proceedings

         None

Item 2.  Changes in Securities

         None

Item 3.  Defaults Upon Senior Securities

         None

Item 4.  Submission of Matter to a Vote of Security Holders

         None

Item 5.  Other Information

         None

Item 6.  Exhibits and Reports on Form 8-K

        (a)  Exhibits:

               31.1 Rule 13a-14(a)/15d-14(a) Certification
31.2 Rule 13a-14(a)/15d-14(a) Certification
               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

        (b)  No reports on Form 8-K were filed during the quarter for which
this report is filed.



                                SIGNATURES


Pursuant  to the requirements of the Securities Exchange Act of  1934,  the
registrant  has duly caused this report to be signed on its behalf  by  the
undersigned thereunto duly authorized.

                                 SOUTHWEST ROYALTIES INSTITUTIONAL
                                 INCOME FUND VIII-B, L.P.
                                 a Delaware limited partnership


                                 By:   Southwest Royalties, Inc.
                                       Managing General Partner


                                 By: /s/ Mel G. Riggs
                                   Mel G. Riggs
                                     Vice  President  and  Chief  Financial
Officer


Date:  November 15, 2004

                    SECTION 302 CERTIFICATION                Exhibit 31.1


I, L. Paul Latham, certify that:

1.   I  have  reviewed  this quarterly report on  Form  10-Q  of  Southwest
Royalties Institutional Income Fund VIII-B, L.P.

2.Based  on my knowledge, this report does not contain any untrue statement
  of  a  material fact or omit to state a material fact necessary  to  make
  the  statements  made,  in light of the circumstances  under  which  such
  statements  were made, not misleading with respect to the period  covered
  by this report;

3.Based  on  my  knowledge, the financial statements, and  other  financial
  information  included  in  this report, fairly present  in  all  material
  respects  the financial condition, results of operations and  cash  flows
  of the registrant as of, and for, the periods presented in this report;

4.The  registrant's other certifying officer(s) and I are  responsible  for
  establishing  and  maintaining disclosure  controls  and  procedures  (as
  defined   in  Exchange  Act  Rules  13a-15(e)  and  15d-15(e))  for   the
  registrant and have:

  a)Designed  such  disclosure  controls and  procedures,  or  caused  such
     disclosure   controls  and  procedures  to  be  designed   under   our
     supervision,  to  ensure  that material information  relating  to  the
     registrant, including its consolidated subsidiaries, is made known  to
     us  by others within those entities, particularly during the period in
     which this report is being prepared;

  b)Evaluated  the  effectiveness of the registrant's  disclosure  controls
     and  procedures and presented in this report our conclusions about the
     effectiveness of the disclosure controls and procedures, as of the end
     of the period covered by this report based on such evaluation; and

  c)Disclosed  in  this  report  any change in  the  registrant's  internal
     control over financial reporting that occurred during the registrant's
     most recent fiscal quarter (the registrant's fourth fiscal quarter  in
     the  case  of  an annual report) that has materially affected,  or  is
     reasonably  likely  to  materially affect, the  registrant's  internal
     control over financial reporting; and

5.The  registrant's other certifying officer(s) and I have disclosed, based
  on  our  most  recent  evaluation  of  internal  control  over  financial
  reporting,  to  the  registrant's auditors and  the  audit  committee  of
  registrant's  board  of directors (or persons performing  the  equivalent
  functions):

  a)All  significant deficiencies and material weaknesses in the design  or
     operation   of   internal  control  over  financial  reporting   which
     reasonably  likely  to  adversely affect the registrant's  ability  to
     record, process, summarize and report financial information; and

  b)Any  fraud, whether or not material, that involves management or  other
     employees  who  have  a significant role in the registrant's  internal
     control over financial reporting.


Date:  November 15, 2004           /s/ L. Paul Latham
                                   L. Paul Latham
                                   President and Chief Executive Officer
                                   of Southwest Royalties, Inc., the
                                   Managing General Partner of
                                   Southwest Royalties Institutional Income
Fund VIII-B, L.P.



                    SECTION 302 CERTIFICATION                Exhibit 31.2


I, Mel G. Riggs, certify that:

1.   I  have  reviewed  this quarterly report on  Form  10-Q  of  Southwest
Royalties Institutional Income Fund VIII-B, L.P.

2.Based  on my knowledge, this report does not contain any untrue statement
  of  a  material fact or omit to state a material fact necessary  to  make
  the  statements  made,  in light of the circumstances  under  which  such
  statements  were made, not misleading with respect to the period  covered
  by this report;

3.Based  on  my  knowledge, the financial statements, and  other  financial
  information  included  in  this report, fairly present  in  all  material
  respects  the financial condition, results of operations and  cash  flows
  of the registrant as of, and for, the periods presented in this report;

4.The  registrant's other certifying officer(s) and I are  responsible  for
  establishing  and  maintaining disclosure  controls  and  procedures  (as
  defined   in  Exchange  Act  Rules  13a-15(e)  and  15d-15(e))  for   the
  registrant and have:

  a)Designed  such  disclosure  controls and  procedures,  or  caused  such
     disclosure   controls  and  procedures  to  be  designed   under   our
     supervision,  to  ensure  that material information  relating  to  the
     registrant, including its consolidated subsidiaries, is made known  to
     us  by others within those entities, particularly during the period in
     which this report is being prepared;

  b)Evaluated  the  effectiveness of the registrant's  disclosure  controls
     and  procedures and presented in this report our conclusions about the
     effectiveness of the disclosure controls and procedures, as of the end
     of the period covered by this report based on such evaluation; and

  c)Disclosed  in  this  report  any change in  the  registrant's  internal
     control over financial reporting that occurred during the registrant's
     most recent fiscal quarter (the registrant's fourth fiscal quarter  in
     the  case  of  an annual report) that has materially affected,  or  is
     reasonably  likely  to  materially affect, the  registrant's  internal
     control over financial reporting; and

5.The  registrant's other certifying officer(s) and I have disclosed, based
  on  our  most  recent  evaluation  of  internal  control  over  financial
  reporting,  to  the  registrant's auditors and  the  audit  committee  of
  registrant's  board  of directors (or persons performing  the  equivalent
  functions):

  a)All  significant deficiencies and material weaknesses in the design  or
     operation   of   internal  control  over  financial  reporting   which
     reasonably  likely  to  adversely affect the registrant's  ability  to
     record, process, summarize and report financial information; and

  b)Any  fraud, whether or not material, that involves management or  other
     employees  who  have  a significant role in the registrant's  internal
     control over financial reporting.


Date:  November 15, 2004           /s/ Mel G. Riggs
                                   Mel G. Riggs
                                     Vice  President  and  Chief  Financial
Officer of
                                   Southwest Royalties, Inc., the
                                   Managing General Partner of
                                   Southwest Royalties Institutional Income
Fund VIII-B, L.P.



                          CERTIFICATION PURSUANT TO
                               Exhibit 32.1
                          19 U.S.C. SECTION 1350,
                          AS ADOPTED PURSUANT TO
               SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002


      In  connection  with  the  Quarterly Report  of  Southwest  Royalties
Institutional  Income Fund VIII-B, L. P. (the "Company") on Form  10-Q  for
the  period  ending  September 30, 2004 as filed with  the  Securities  and
Exchange  Commission on the date hereof (the "Report"), I, L. Paul  Latham,
Chief  Executive  Officer of the Managing General Partner of  the  Company,
certify,  pursuant to 18 U.S.C.  1350, as adopted pursuant to  906  of  the
Sarbanes-Oxley Act of 2002, that:

     (1)  The Report fully complies with the requirements of section 13(a) or
       15(d) of the Securities Exchange Act of 1934; and

     (2)   The information contained in the Report fairly presents, in  all
       material respects, the financial condition and results
of operation of the
       Company.


Date:  November 15, 2004




/s/ L. Paul Latham
L. Paul Latham
President and Chief Executive Officer
  of Southwest Royalties, Inc., the
  Managing General Partner of
  Southwest Royalties Institutional Income Fund VIII-B, L.P.

              CERTIFICATION PURSUANT TO            Exhibit 32.2
                          19 U.S.C. SECTION 1350,
                          AS ADOPTED PURSUANT TO
               SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002


      In  connection  with  the  Quarterly Report  of  Southwest  Royalties
Institutional  Income Fund VIII-B, L. P. (the "Company") on Form  10-Q  for
the  period  ending  September 30, 2004 as filed with  the  Securities  and
Exchange  Commission on the date hereof (the "Report"), I,  Mel  G.  Riggs,
Chief  Financial  Officer of the Managing General Partner of  the  Company,
certify,  pursuant to 18 U.S.C.  1350, as adopted pursuant to  906  of  the
Sarbanes-Oxley Act of 2002, that:

     (1)  The Report fully complies with the requirements of section 13(a) or
       15(d) of the Securities Exchange Act of 1934; and

     (2)   The information contained in the Report fairly presents, in  all
       material respects, the financial condition and results
of operation of the
       Company.


Date: November 15, 2004




/s/ Mel G. Riggs
Mel G. Riggs
Vice President and Chief Financial Officer of
  and Chief Financial Officer of
  Southwest Royalties, Inc., the
  Managing General Partner of
  Southwest Royalties Institutional Income Fund VIII-B, L.P.