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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
 (Mark One)
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended September 30, 2009
 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
(State or other jurisdiction of 
incorporation or organization)
    
    41-1464066
(I.R.S. Employer
Identification No.)
 One Post Oak Central, 2000 Post Oak Boulevard, Suite 100, Houston, Texas 77056-4400
 (713) 296-6000
 þ o
 o 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
 Number of registrants units outstanding as of September 30, 2009
    
    1,022




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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. EXHIBITSSIGNATURESEX-31.1EX-31.2EX-32.1    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 Nine MonthsEnded September 30,
    
    
    Ended September 30,2009
    
    
    2008
    
    
    2009
    
    
    2008REVENUES:Oil and gas sales
    
    $
    1,073,780
    
    
    $
    2,027,808
    
    
    $
    2,964,222
    
    
    $
    6,821,015Interest income
    
    
    24
    
    
    
    14,517
    
    
    
    188
    
    
    
    41,5191,073,804
    
    
    
    2,042,325
    
    
    
    2,964,410
    
    
    
    6,862,534EXPENSES:Depreciation, depletion and amortization
    
    
    207,443
    
    
    
    209,517
    
    
    
    685,833
    
    
    
    668,669Asset retirement obligation accretion
    
    
    16,945
    
    
    
    15,986
    
    
    
    50,104
    
    
    
    47,269Lease operating expenses
    
    
    356,059
    
    
    
    354,715
    
    
    
    1,119,256
    
    
    
    861,691Gathering and transportation costs
    
    
    22,827
    
    
    
    20,664
    
    
    
    51,509
    
    
    
    51,526Administrative
    
    
    112,500
    
    
    
    138,000
    
    
    
    337,500
    
    
    
    346,000715,774
    
    
    
    738,882
    
    
    
    2,244,202
    
    
    
    1,975,155NET INCOME
    
    $
    358,030
    
    
    $
    1,303,443
    
    
    $
    720,208
    
    
    $
    4,887,379NET INCOME ALLOCATED TO:Managing Partner
    
    $
    111,322
    
    
    $
    297,483
    
    
    $
    274,696
    
    
    $
    1,096,013Investing Partners
    
    
    246,708
    
    
    
    1,005,960
    
    
    
    445,512
    
    
    
    3,791,366$
    358,030
    
    
    $
    1,303,443
    
    
    $
    720,208
    
    
    $
    4,887,379NET INCOME PER INVESTING PARTNER UNIT
    
    $
    242
    
    
    $
    977
    
    
    $
    436
    
    
    $
    3,665WEIGHTED AVERAGE INVESTING PARTNER
UNITS OUTSTANDING
    
    
    1021.5
    
    
    
    1,029.5
    
    
    
    1021.5
    
    
    
    1,034.5
 
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APACHE OFFSHORE INVESTMENT PARTNERSHIP
 STATEMENT OF CONSOLIDATED CASH FLOWS
(Unaudited)
 For the Nine MonthsEnded September 30,2009
    
    
    2008CASH FLOWS FROM OPERATING ACTIVITIES:Net income
    
    $
    720,208
    
    
    $
    4,887,379Adjustments to reconcile net income to net cash
provided by operating activities:Depreciation, depletion and amortization
    
    
    685,833
    
    
    
    668,669Asset retirement obligation accretion
    
    
    50,104
    
    
    
    47,269Changes in operating assets and liabilities:(Increase) decrease in accrued receivables
    
    
    (5,230
    )
    
    
    105,217Increase (decrease) in payable to
Apache Corporation
    
    
    (176,798
    )
    
    
    150,131Increase (decrease) in accrued operating expenses
    
    
    28,619
    
    
    
    (120,509
    )Net cash provided by operating activities
    
    
    1,302,736
    
    
    
    5,738,156CASH FLOWS FROM INVESTING ACTIVITIES:Additions to oil and gas properties
    
    
    (609,560
    )
    
    
    (198,496
    )Net cash used in investing activities
    
    
    (609,560
    )
    
    
    (198,496
    )CASH FLOWS FROM FINANCING ACTIVITIES:Repurchase of Partnership Units
    
    
    
    
    
    
    (119,227
    )Distributions to Investing Partners
    
    
    
    
    
    
    (2,076,388
    )Distributions to Managing Partner
    
    
    (262,850
    )
    
    
    (1,084,143
    )Net cash used in financing activities
    
    
    (262,850
    )
    
    
    (3,279,758
    )NET INCREASE IN CASH AND CASH EQUIVALENTS
    
    
    430,326
    
    
    
    2,259,902CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR
    
    
    1,131,615
    
    
    
    2,781,885CASH AND CASH EQUIVALENTS, END OF PERIOD
    
    $
    1,561,941
    
    
    $
    5,041,787
 
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APACHE OFFSHORE INVESTMENT PARTNERSHIP
CONSOLIDATED BALANCE SHEET
(Unaudited)
 September 30,
    
    
    December 31,2009
    
    
    2008ASSETSCURRENT ASSETS:Cash and cash equivalents
    
    $
    1,561,941
    
    
    $
    1,131,615Accrued revenues receivable
    
    
    271,443
    
    
    
    330,818Accrued insurance receivable
    
    
    64,605
    
    
    
    1,897,989
    
    
    
    1,462,433OIL AND GAS PROPERTIES, on the basis of full cost accounting:Proved properties
    
    
    187,576,644
    
    
    
    186,955,531Less  Accumulated depreciation, depletion and amortization
    
    
    (182,423,379
    )
    
    
    (181,737,546
    )5,153,265
    
    
    
    5,217,985$
    7,051,254
    
    
    $
    6,680,418LIABILITIES AND PARTNERS CAPITALCURRENT LIABILITIES:Payable to Apache Corporation
    
    $
    69,819
    
    
    $
    246,617Accrued exploration and development
    
    
    34,182
    
    
    
    22,629Accrued operating expenses
    
    
    127,225
    
    
    
    98,606231,226
    
    
    
    367,852ASSET RETIREMENT OBLIGATION
    
    
    1,171,912
    
    
    
    1,121,808PARTNERS CAPITAL:Managing Partner
    
    
    76,311
    
    
    
    64,465Investing Partners (1,021.5 units outstanding)
    
    
    5,571,805
    
    
    
    5,126,2935,648,116
    
    
    
    5,190,758$
    7,051,254
    
    
    $
    6,680,418
 
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APACHE OFFSHORE INVESTMENT PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
   1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
  Use of Estimates
  Recently Adopted Accounting Pronouncements
  
    
    The period after the balance sheet date during which management of a reporting entity
should evaluate events or transactions that may occur for potential recognition or
disclosure in the financial statements; and
    
    The circumstances under which an entity should recognize events or transactions
occurring after the balance sheet date in its financial statements; and
    
    The disclosures that an entity should make about events or transactions that occurred
after the balance sheet date.
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TM
 New Pronouncements Issued But Not Yet Adopted
 
 2. PAYABLE TO APACHE CORPORATION
  3. RIGHT OF PRESENTMENT
  4. ASSET RETIREMENT OBLIGATIONS
  Asset retirement obligation at December 31, 2008
    
    $
    1,121,808Accretion expense
    
    
    50,104Asset retirement obligation at September 30, 2009
    
    $
    1,171,912
  5




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5. SUBSEQUENT EVENTS
  6




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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 September 30,
    
    For the Nine Months Ended September 30,Increase
    
    
    
    
    
    Increase2009
    
    2008
    
    (Decrease)
    
    2009
    
    2008
    
    (Decrease)Gas volume  Mcf per day
    
    
    1,603
    
    
    
    1,190
    
    
    
    35
    %
    
    
    1,295
    
    
    
    1,172
    
    
    
    10
    %Average gas price  per Mcf
    
    $
    3.20
    
    
    $
    10.10
    
    
    
    (68
    %)
    
    $
    3.97
    
    
    $
    9.98
    
    
    
    (60
    %)Oil volume  barrels per day
    
    
    88
    
    
    
    72
    
    
    
    22
    %
    
    
    99
    
    
    
    104
    
    
    
    (5
    %)Average oil price  per barrel
    
    $
    67.40
    
    
    $
    126.20
    
    
    
    (47
    %)
    
    $
    52.67
    
    
    $
    115.72
    
    
    
    (54
    %)NGL volume  barrels per day
    
    
    19
    
    
    
    14
    
    
    
    36
    %
    
    
    17
    
    
    
    22
    
    
    
    (23
    %)Average NGL price  per barrel
    
    $
    33.38
    
    
    $
    69.08
    
    
    
    (52
    %)
    
    $
    28.96
    
    
    $
    55.00
    
    
    
    (47
    %)
 Oil and Gas Sales
  7




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Operating Expenses
   8




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Capital Resources and Liquidity
       Capital Commitments
  9




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Pricing Trends
  10




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2009
    
    2008Crude Oil
    
    Natural Gas
    
    Crude Oil
    
    Natural Gas(per bbl)
    
    (per Mcf)
    
    (per bbl)
    
    (per Mcf)January
    
    $
    41.99
    
    
    $
    5.96
    
    
    $
    92.96
    
    
    $
    7.08February
    
    $
    39.47
    
    
    $
    4.49
    
    
    $
    94.92
    
    
    $
    8.03March
    
    $
    48.25
    
    
    $
    4.13
    
    
    $
    105.15
    
    
    $
    9.11April
    
    $
    50.48
    
    
    $
    3.97
    
    
    $
    112.62
    
    
    $
    9.52May
    
    $
    59.51
    
    
    $
    3.29
    
    
    $
    125.67
    
    
    $
    11.01June
    
    $
    69.72
    
    
    $
    3.53
    
    
    $
    134.65
    
    
    $
    11.86July
    
    $
    64.49
    
    
    $
    3.85
    
    
    $
    134.42
    
    
    $
    11.20August
    
    $
    71.05
    
    
    $
    3.51
    
    
    $
    116.73
    
    
    $
    8.30September
    
    $
    69.25
    
    
    $
    2.88
    
    
    $
    104.41
    
    
    $
    7.50
  
 ITEM 3  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
   
 ITEM 4  CONTROLS AND PROCEDURES
 Disclosure Controls and Procedures
  Changes in Internal Control over Financial Reporting
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FORWARD-LOOKING STATEMENTS AND RISK
  
    
    the market prices of oil, natural gas, NGLs and other products or services;
    
    the supply and demand for oil, natural gas, NGLs and other products or services;
    
    production and reserve levels;
    
    drilling risks;
    
    economic and competitive conditions;
    
    the availability of capital resources;
    
    capital expenditure and other contractual obligations;
    
    weather conditions;
    
    inflation rates;
    
    the availability of goods and services;
    
    legislative or regulatory changes;
    
    terrorism;
    
    occurrence of property acquisitions or divestitures;
    
    the securities or capital markets and related risks such as general credit, liquidity,
market and interest-rate risks; and
    
    other factors disclosed under Items 1 and 2  Business and Properties  Estimated
Proved Reserves and Future Net Cash Flows, Item 1A  Risk Factors, Item 7 
Managements Discussion and Analysis of Financial Condition and Results of Operations,
Item 7A  Quantitative and Qualitative Disclosures About Market Risk, and elsewhere in
our most recently filed Annual Report on Form 10-K.
  12




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PART II  OTHER INFORMATION
 
   
   Proposed federal climate change regulation could increase the Partnerships operating and
capital costs.
   Proposed federal regulation regarding hydraulic fracturing could increase the
Partnerships operating and capital costs.
   
   
   
   
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a.
    
    Exhibits
 *3.1
    Partnership Agreement of Apache Offshore Investment Partnership
(incorporated by reference to Exhibit (3)(i) to Form 10 filed by Partnership
with the Commission on April 30, 1985, Commission File No. 0-13546).*3.2
    Amendment No. 1, dated February 11, 1994, to the Partnership
Agreement of Apache Offshore Investment Partnership (incorporated by reference
to Exhibit 3.3 to Partnerships Annual Report on Form 10-K for the year ended
December 31, 1993, Commission File No. 0-13546).*3.3
    Limited Partnership Agreement of Apache Offshore Petroleum
Limited Partnership (incorporated by reference to Exhibit (3)(ii) to Form 10
filed by Partnership with the Commission on April 30, 1985, Commission File No.
0-13546).**31.1
    Certification (pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Exchange
Act) by Principal Executive Officer**31.2
    Certification (pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Exchange
Act) by Principal Financial Officer**32.1
    Section 1350 Certification (pursuant to Sarbanes-Oxley Section 906) by
Principal Executive Officer and Principal Financial Officer
 
 *
    
    Incorporated by reference herein.**
    
    Filed herewith. 14




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SIGNATURES
  APACHE OFFSHORE INVESTMENT PARTNERSHIPBy: Apache Corporation, Managing PartnerDated: November 6, 2009
    /s/  Roger B. PlankRoger B. PlankPresident (principal financial officer)
of Apache Corporation, Managing PartnerDated: November 6, 2009
    /s/ Rebecca A. HoytRebecca A. HoytVice President and Controller (principal accounting officer)
of Apache Corporation, Managing Partner