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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 March 31, 2007
 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 Number)Suite 100, One Post Oak Central2000 Post Oak Boulevard, Houston, TX
    
    77056-4400(Address of Principal Executive Offices)
    
    (Zip Code)
   þ o
  o o 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 4  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 of CEO Pursuant to Section 302Certification of CFO Pursuant to Section 302Certification of CEO and CFO Pursuant to Section 1350    Table of Contents  
 PART I  FINANCIAL INFORMATION
 
 ITEM 1  FINANCIAL STATEMENTS
 APACHE OFFSHORE INVESTMENT PARTNERSHIP
STATEMENT OF CONSOLIDATED INCOME
(Unaudited)
 For the Three MonthsEnded March 31,2007
    
    
    2006REVENUES:Oil and gas sales
    
    $
    1,888,281
    
    
    $
    3,381,074Interest income
    
    
    29,541
    
    
    
    32,6321,917,822
    
    
    
    3,413,706EXPENSES:Depreciation, depletion and amortization
    
    
    271,990
    
    
    
    451,663Asset retirement obligation accretion
    
    
    10,889
    
    
    
    10,273Lease operating costs
    
    
    224,170
    
    
    
    296,703Gathering and transportation expense
    
    
    25,280
    
    
    
    48,732Administrative
    
    
    107,000
    
    
    
    107,000639,329
    
    
    
    914,371NET INCOME
    
    $
    1,278,493
    
    
    $
    2,499,335NET INCOME ALLOCATED TO:Managing Partner
    
    $
    306,176
    
    
    $
    574,426Investing Partners
    
    
    972,317
    
    
    
    1,924,909$
    1,278,493
    
    
    $
    2,499,335NET INCOME PER INVESTING PARTNER UNIT
    
    $
    928
    
    
    $
    1,827WEIGHTED AVERAGE INVESTING PARTNER
UNITS OUTSTANDING
    
    
    1,048.3
    
    
    
    1,053.4
 
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##### Table of Contents



APACHE OFFSHORE INVESTMENT PARTNERSHIP
STATEMENT OF CONSOLIDATED CASH FLOWS
(Unaudited)
 For the Three MonthsEnded March 31,2007
    
    
    2006CASH FLOWS FROM OPERATING ACTIVITIES:Net income
    
    $
    1,278,493
    
    
    $
    2,499,335Adjustments to reconcile net income to net cash
provided by operating activities:Depreciation, depletion and amortization
    
    
    271,990
    
    
    
    451,663Asset retirement obligation accretion
    
    
    10,889
    
    
    
    10,273Changes in operating assets and liabilities:(Increase) decrease in accrued revenues receivable
    
    
    56,380
    
    
    
    763,268(Increase) decrease in receivable from/payable to
Apache Corporation
    
    
    (128,011
    )
    
    
    373,376Increase (decrease) in accrued operating expenses payable
    
    
    46,575
    
    
    
    6,627Net cash provided by operating activities
    
    
    1,536,316
    
    
    
    4,104,542CASH FLOWS FROM INVESTING ACTIVITIES:Additions to oil and gas properties
    
    
    (4,731
    )
    
    
    (518,323
    )Net cash used in investing activities
    
    
    (4,731
    )
    
    
    (518,323
    )CASH FLOWS FROM FINANCING ACTIVITIES:Distributions to Investing Partners
    
    
    (2,096,555
    )
    
    
    (3,686,932
    )Distributions to Managing Partner
    
    
    (325,188
    )
    
    
    (730,964
    )Net cash used in financing activities
    
    
    (2,421,743
    )
    
    
    (4,417,896
    )NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS
    
    
    (890,158
    )
    
    
    (831,677
    )CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR
    
    
    2,358,999
    
    
    
    2,611,653CASH AND CASH EQUIVALENTS, END OF PERIOD
    
    $
    1,468,841
    
    
    $
    1,779,976
 
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APACHE OFFSHORE INVESTMENT PARTNERSHIP
CONSOLIDATED BALANCE SHEET
(Unaudited)
 March 31,
    
    
    December 31,2007
    
    
    2006ASSETSCURRENT ASSETS:Cash and cash equivalents
    
    $
    1,468,841
    
    
    $
    2,358,999Accrued revenues receivable
    
    
    476,797
    
    
    
    533,1771,945,638
    
    
    
    2,892,176OIL AND GAS PROPERTIES, on the basis of full cost accounting:Proved properties
    
    
    185,578,756
    
    
    
    185,574,025Less  Accumulated depreciation, depletion and amortization
    
    
    (180,109,077
    )
    
    
    (179,837,087
    )5,469,679
    
    
    
    5,736,938$
    7,415,317
    
    
    $
    8,629,114LIABILITIES AND PARTNERS CAPITALCURRENT LIABILITIES:Payable to Apache Corporation
    
    $
    46,542
    
    
    $
    174,553Accrued operating expenses
    
    
    134,181
    
    
    
    87,606180,723
    
    
    
    262,159ASSET RETIREMENT OBLIGATION
    
    
    753,045
    
    
    
    742,156PARTNERS CAPITAL:Managing Partner
    
    
    56,261
    
    
    
    75,272Investing Partners (1,048.3 units outstanding)
    
    
    6,425,288
    
    
    
    7,549,5276,481,549
    
    
    
    7,624,799$
    7,415,317
    
    
    $
    8,629,114
 
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APACHE OFFSHORE INVESTMENT PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
  1. PAYABLE TO APACHE CORPORATION
  2. RIGHT OF PRESENTMENT
  3. ASSET RETIREMENT OBLIGATIONS
  Asset retirement obligation at December 31, 2006
    
    $
    742,156Accretion expense
    
    
    10,889Asset retirement obligation at March 31, 2007
    
    $
    753,045
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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 Three MonthsEnded March 31,
    
    Increase2007
    
    2006
    
    (Decrease)Gas volume  Mcf per day
    
    
    1,826
    
    
    
    2,772
    
    
    
    (34
    %)Average gas price  per Mcf
    
    $
    7.22
    
    
    $
    9.01
    
    
    
    (20
    %)Oil volume  barrels per day
    
    
    119
    
    
    
    174
    
    
    
    (32
    %)Average oil price  per barrel
    
    $
    60.56
    
    
    $
    61.43
    
    
    
    (1
    %)Natural gas liquids (NGL) volume  barrels per day
    
    
    19
    
    
    
    52
    
    
    
    (63
    %)Average NGL price  per barrel
    
    $
    31.92
    
    
    $
    36.90
    
    
    
    (13
    %)
 Oil and Gas Sales
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Operating Expenses
   Capital Resources and Liquidity
      Capital Commitments
   6




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ITEM 3  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
   
 ITEM 4  CONTROLS AND PROCEDURES
  FORWARD-LOOKING STATEMENTS AND RISK
   7




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PART
II - OTHER INFORMATION
 
   
   
   
   
   
   
   31.1
    
       Certification of Chief Executive Officer31.2
    
       Certification of Chief Financial Officer32.1
    
       Certification of Chief Executive Officer and Chief Financial Officer
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SIGNATURES
  APACHE OFFSHORE INVESTMENT PARTNERSHIPBy: Apache Corporation, General PartnerDated: May 9, 2007
    
    /s/ Roger B. Plank

Roger B. PlankExecutive Vice President and Chief Financial OfficerDated: May 9, 2007
    
    /s/ Rebecca A. HoytRebecca A. HoytVice President and Controller(Chief Accounting Officer)




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Exhibit Index
 31.1
    
       Certification of Chief Executive Officer31.2
    
       Certification of Chief Financial Officer32.1
    
       Certification of Chief Executive Officer and Chief Financial Officer