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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 For the Quarterly Period Ended June 30, 2008
 OR
 o
    
    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 0-13546
 APACHE OFFSHORE INVESTMENT PARTNERSHIP
  Delaware
    
    41-1464066(State or Other Jurisdiction of
    
    (I.R.S. EmployerIncorporation or Organization)
    
    Identification No.)Suite 100, One Post Oak Central2000 Post Oak Boulevard, Houston, TX
    
    77056-4400(Address of Principal Executive Offices)
    
    (Zip Code)
   þ o
  Large accelerated filer
o
    
    Accelerated filer o
    
    Non-accelerated filer   o
(Do not check if a smaller reporting company)
    
    Smaller reporting company
þ
  o þ




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TABLE OF CONTENTS  PART I  FINANCIAL INFORMATIONITEM 1  FINANCIAL STATEMENTSITEM 2  MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSITEM 3  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKITEM 4T  CONTROLS AND PROCEDURESPART II  OTHER INFORMATIONITEM 1. LEGAL PROCEEDINGSITEM 1A. RISK FACTORSITEM 2. UNREGISTERED SALES OF EQUITY IN SECURITIES AND USE OF PROCEEDSITEM 3. DEFAULTS UPON SENIOR SECURITIESITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERSITEM 5. OTHER INFORMATIONITEM 6. EXHIBITSSIGNATURESEXHIBIT INDEXCertification by CEO Pursuant to Rule 13a-14(a) or Rule 15d-14(a)Certification by CFO Pursuant to Rule 13a-14(a) or Rule 15d-14(a)Certification by CEO & CFO Pursuant to Section 906    Table of Contents  
 PART I  FINANCIAL INFORMATION
 
 ITEM 1  FINANCIAL STATEMENTS
 APACHE OFFSHORE INVESTMENT PARTNERSHIP
STATEMENT OF CONSOLIDATED INCOME
(Unaudited)
 For the Quarter
    
    
    For the Six MonthsEnded June 30,
    
    
    Ended June 30,2008
    
    
    2007
    
    
    2008
    
    
    2007REVENUES:Oil and gas sales
    
    $
    2,601,783
    
    
    $
    1,806,048
    
    
    $
    4,793,207
    
    
    $
    3,694,329Interest income
    
    
    8,716
    
    
    
    22,122
    
    
    
    27,002
    
    
    
    51,6632,610,499
    
    
    
    1,828,170
    
    
    
    4,820,209
    
    
    
    3,745,992EXPENSES:Depreciation, depletion and amortization
    
    
    233,322
    
    
    
    235,925
    
    
    
    459,152
    
    
    
    507,915Asset retirement obligation accretion
    
    
    15,755
    
    
    
    11,047
    
    
    
    31,283
    
    
    
    21,936Lease operating expenses
    
    
    271,454
    
    
    
    479,277
    
    
    
    506,976
    
    
    
    703,447Gathering and transportation costs
    
    
    10,472
    
    
    
    25,218
    
    
    
    30,862
    
    
    
    50,498Administrative
    
    
    103,250
    
    
    
    107,000
    
    
    
    208,000
    
    
    
    214,000634,253
    
    
    
    858,467
    
    
    
    1,236,273
    
    
    
    1,497,796NET INCOME
    
    $
    1,976,246
    
    
    $
    969,703
    
    
    $
    3,583,936
    
    
    $
    2,248,196NET INCOME ALLOCATED TO:Managing Partner
    
    $
    437,774
    
    
    $
    238,691
    
    
    $
    798,530
    
    
    $
    544,867Investing Partners
    
    
    1,538,472
    
    
    
    731,012
    
    
    
    2,785,406
    
    
    
    1,703,329$
    1,976,246
    
    
    $
    969,703
    
    
    $
    3,583,936
    
    
    $
    2,248,196NET INCOME PER INVESTING PARTNER UNIT
    
    $
    1,485
    
    
    $
    698
    
    
    $
    2,686
    
    
    $
    1,626WEIGHTED AVERAGE INVESTING PARTNER
UNITS OUTSTANDING
    
    
    1,035.8
    
    
    
    1,047.2
    
    
    
    1,037.0
    
    
    
    1,047.7
 
 1




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APACHE OFFSHORE INVESTMENT PARTNERSHIP
STATEMENT OF CONSOLIDATED CASH FLOWS
(Unaudited)
 For the Six Months Ended June 30,2008
    
    
    2007CASH FLOWS FROM OPERATING ACTIVITIES:Net income
    
    $
    3,583,936
    
    
    $
    2,248,196Adjustments to reconcile net income to net cash
provided by operating activities:Depreciation, depletion and amortization
    
    
    459,152
    
    
    
    507,915Asset retirement obligation accretion
    
    
    31,283
    
    
    
    21,936Changes in operating assets and liabilities:(Increase) decrease in accrued revenues receivable
    
    
    (88,684
    )
    
    
    177,757Increase (decrease) in receivable from/payable to
Apache Corporation
    
    
    (70,367
    )
    
    
    (19,290
    )Increase (decrease) in accrued operating expenses
    
    
    (70,008
    )
    
    
    (14,933
    )Net cash provided by operating activities
    
    
    3,845,312
    
    
    
    2,921,581CASH FLOWS FROM INVESTING ACTIVITIES:Additions to oil and gas properties
    
    
    (30,432
    )
    
    
    (138,231
    )Net cash used in investing activities
    
    
    (30,432
    )
    
    
    (138,231
    )CASH FLOWS FROM FINANCING ACTIVITIES:Repurchase of Partnership Units
    
    
    (119,227
    )
    
    
    (55,568
    )Distributions to Investing Partners
    
    
    (2,076,388
    )
    
    
    (2,096,555
    )Distributions to Managing Partner
    
    
    (771,107
    )
    
    
    (574,676
    )Net cash used in financing activities
    
    
    (2,966,722
    )
    
    
    (2,726,799
    )NET INCREASE IN CASH AND CASH EQUIVALENTS
    
    
    848,158
    
    
    
    56,551CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR
    
    
    2,781,885
    
    
    
    2,358,999CASH AND CASH EQUIVALENTS, END OF PERIOD
    
    $
    3,630,043
    
    
    $
    2,415,550
 
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APACHE OFFSHORE INVESTMENT PARTNERSHIP
CONSOLIDATED BALANCE SHEET
(Unaudited)
 June 30,
    
    
    December 31,2008
    
    
    2007ASSETSCURRENT ASSETS:Cash and cash equivalents
    
    $
    3,630,043
    
    
    $
    2,781,885Accrued revenues receivable
    
    
    450,943
    
    
    
    362,259Receivable from Apache Corporation
    
    
    19,395
    
    
    
    4,100,381
    
    
    
    3,144,144OIL AND GAS PROPERTIES, on the basis of full cost accounting:Proved properties
    
    
    186,030,434
    
    
    
    185,999,480Less  Accumulated depreciation, depletion and amortization
    
    
    (181,295,065
    )
    
    
    (180,835,913
    )4,735,369
    
    
    
    5,163,567$
    8,835,750
    
    
    $
    8,307,711LIABILITIES AND PARTNERS CAPITALCURRENT LIABILITIES:Payable to Apache Corporation
    
    $
    
    
    
    $
    50,972Accrued exploration and development
    
    
    522
    
    
    
    Accrued operating expenses
    
    
    168,310
    
    
    
    238,318168,832
    
    
    
    289,290ASSET RETIREMENT OBLIGATION
    
    
    1,089,602
    
    
    
    1,058,319PARTNERS CAPITAL:Managing Partner
    
    
    58,626
    
    
    
    31,203Investing Partners (1,029.5 and 1,038.2 units outstanding respectively)
    
    
    7,518,690
    
    
    
    6,928,8997,577,316
    
    
    
    6,960,102$
    8,835,750
    
    
    $
    8,307,711
 
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APACHE OFFSHORE INVESTMENT PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
   1. RECEIVABLE FROM/PAYABLE TO APACHE CORPORATION
  2. RIGHT OF PRESENTMENT
   3. ASSET RETIREMENT OBLIGATIONS
  Asset retirement obligation at December 31, 2007
    
    $
    1,058,319Accretion expense
    
    
    31,283Asset retirement obligation at June 30, 2008
    
    $
    1,089,602
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5




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ITEM 2 
    
    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 RESULTS OF OPERATIONS
 Net Income and Revenue
     For the Quarter Ended June 30,
    
    For the Six Months Ended June 30,Increase
    
    
    
    
    
    
    
    
    
    Increase2008
    
    2007
    
    (Decrease)
    
    2008
    
    2007
    
    (Decrease)Gas volume  Mcf per day
    
    
    1,090
    
    
    
    1,465
    
    
    
    (26
    %)
    
    
    1,163
    
    
    
    1,644
    
    
    
    (29
    %)Average gas price  per Mcf
    
    $
    11.63
    
    
    $
    7.73
    
    
    
    50
    %
    
    $
    9.91
    
    
    $
    7.45
    
    
    
    33
    %Oil volume  barrels per day
    
    
    117
    
    
    
    114
    
    
    
    3
    %
    
    
    120
    
    
    
    116
    
    
    
    3
    %Average oil price  per barrel
    
    $
    125.84
    
    
    $
    65.64
    
    
    
    92
    %
    
    $
    112.57
    
    
    $
    63.06
    
    
    
    79
    %NGL volume  barrels per day
    
    
    18
    
    
    
    24
    
    
    
    (25
    %)
    
    
    25
    
    
    
    22
    
    
    
    14
    %Average NGL price  per barrel
    
    $
    62.95
    
    
    $
    43.80
    
    
    
    44
    %
    
    $
    50.99
    
    
    $
    38.57
    
    
    
    32
    %
 Oil and Gas Sales
      6




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Operating Expenses
    Capital Resources and Liquidity
    7




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Capital Commitments
       
 ITEM 3  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
   8




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ITEM 4T  CONTROLS AND PROCEDURES
 Disclosure Controls and Procedures
  Changes in Internal Control over Financial Reporting
  FORWARD-LOOKING STATEMENTS AND RISK
   9




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PART
II  OTHER INFORMATION
 
   
   
  a.
    
    Noneb.
    
    Nonec.
    
    The following table presents information on Units purchased during the
quarter ended June 30, 2008:
 Issuer Purchases of Equity SecuritiesTotal Numberof Units
    
    Average PricePeriod
    
    Purchased
    
    Paid Per UnitApril 1 to April 30, 2008
    
    None
    
    
    N/AMay 1 to May 31, 2008
    
    None
    
    
    N/AJune 1 to June 30, 2008
    
    
    8.67
    
    
    $
    13,225
    (1)
 
 (1)
    
    Before interest.  
   
   
   10




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31.1
    
     Certification (pursuant to Rule 13a-14(a) or Rule 15d-14(a)
of the Exchange Act) by Chief Executive Officer31.2
    
     Certification (pursuant to Rule 13a-14(a) or Rule 15d-14(a)
of the Exchange Act) by Chief Financial Officer32.1
    
     Section 1350 Certification (pursuant to Sarbanes-Oxley
Section 906) by Chief Executive Officer and Chief Financial Officer
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SIGNATURES
  APACHE OFFSHORE INVESTMENT PARTNERSHIP
By: Apache Corporation, Managing PartnerDated: August 8, 2008
    
    /s/ Roger B. PlankRoger B. PlankExecutive Vice President and Chief Financial OfficerDated: August 8, 2008
    
    /s/ Rebecca A. HoytRebecca A. HoytVice President and Controller(Chief Accounting Officer)




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31.1
    
     Certification (pursuant to Rule 13a-14(a) or Rule 15d-14(a)
of the Exchange Act) by Chief Executive Officer31.2
    
     Certification (pursuant to Rule 13a-14(a) or Rule 15d-14(a)
of the Exchange Act) by Chief Financial Officer32.1
    
     Section 1350 Certification (pursuant to Sarbanes-Oxley
Section 906) by Chief Executive Officer and Chief Financial Officer