An experimental study has been carried out on the reactions of state selected O+(S-4, D-2, P-2) ions with methane with the aims of characterizing the effects of both the parent ion internal energy and collision energy on the reaction dynamics and determining the fate of oxygen species in complex media, in particular the Titan ionosphere. Absolute cross sections and product velocity distributions have been determined for the reactions of O-16(+) or O-18(+) ions with CH4 or CD4 from thermal to 5 eV collision energies by using the guided ion beam (GIB) technique. Dissociative photoionization of O-2 with vacuum ultraviolet (VUV) synchrotron radiation delivered by the DESIRS beamline at the SOLEIL storage ring and the threshold photoion photoelectron coincidence (TPEPICO) technique are used for the preparation of purely state-selected O+(S-4, D-2, P-2) ions. A complete inversion of the product branching ratio between CH4+ and CH3+ ions in favor of the latter is observed for excitation of O+ ions from the S-4 ground state to either the D-2 or the P-2 metastable state. CH4+ and CH3+ ions, which are by far the major products for the reaction of ground state and excited states, are strongly backward scattered in the center of mass frame relative to O+ parent ions. For the reaction of O+(S-4), CH3+ production also rises with increasing collision energy but with much less efficiency than with O+ excitation. We found that a mechanism of dissociative charge transfer, mediated by an initial charge transfer step, can account very well for all the observations, indicating that CH3+ production is associated with the formation of H and O atoms (CH3+ + H + O) rather than with OH formation by an hydride transfer process (CH3+ + OH). Therefore, as the CH4+ production by charge transfer is also associated with O atoms, the fate of oxygen species in these reactions is essentially the O production, except for the reaction of O+(S-4), which also produces appreciable amounts of H2O+ ions but only at very low collision energy. The production of O atoms and the nature of the states in which they are formed are discussed for the reactions of O+ ions with CH4 and N-2.