##### Table of Contents



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, 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 
Incorporation or Organization)
    
    (I.R.S. Employer
Identification No.)Suite 100, One Post Oak Central2000 Post Oak Boulevard, Houston, TX
(Address of Principal Executive Offices)
    
    77056-4400
(Zip Code)
   YES þ
    
    NO o
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer þ
  YES o
    
    NO 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 SECURITIES AND USE OF PROCEEDSITEM 3. DEFAULTS UPON SENIOR SECURITIESITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERSITEM 5. OTHER INFORMATIONITEM 6. EXHIBITSSIGNATURESCertification of CEO Pursuant to Rule 13a-14(a)Certification of CFO Pursuant to Rule 13a-14(a)Certification of 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 Quarter
    
    
    For the Six MonthsEnded June 30,
    
    
    Ended June 30,2007
    
    
    2006
    
    
    2007
    
    
    2006REVENUES:Oil and gas sales
    
    $
    1,806,048
    
    
    $
    2,835,950
    
    
    $
    3,694,329
    
    
    $
    6,217,024Interest income
    
    
    22,122
    
    
    
    29,665
    
    
    
    51,663
    
    
    
    62,2971,828,170
    
    
    
    2,865,615
    
    
    
    3,745,992
    
    
    
    6,279,321EXPENSES:Depreciation, depletion and amortization
    
    
    235,925
    
    
    
    390,610
    
    
    
    507,915
    
    
    
    842,273Asset retirement obligation accretion
    
    
    11,047
    
    
    
    10,423
    
    
    
    21,936
    
    
    
    20,696Lease operating expenses
    
    
    479,277
    
    
    
    266,749
    
    
    
    703,447
    
    
    
    563,452Gathering and transportation costs
    
    
    25,218
    
    
    
    39,367
    
    
    
    50,498
    
    
    
    88,099Administrative
    
    
    107,000
    
    
    
    107,000
    
    
    
    214,000
    
    
    
    214,000858,467
    
    
    
    814,149
    
    
    
    1,497,796
    
    
    
    1,728,520NET INCOME
    
    $
    969,703
    
    
    $
    2,051,466
    
    
    $
    2,248,196
    
    
    $
    4,550,801NET INCOME ALLOCATED TO:Managing Partner
    
    $
    238,691
    
    
    $
    474,806
    
    
    $
    544,867
    
    
    $
    1,049,232Investing Partners
    
    
    731,012
    
    
    
    1,576,660
    
    
    
    1,703,329
    
    
    
    3,501,569$
    969,703
    
    
    $
    2,051,466
    
    
    $
    2,248,196
    
    
    $
    4,550,801NET INCOME PER INVESTING PARTNER UNIT
    
    $
    698
    
    
    $
    1,497
    
    
    $
    1,626
    
    
    $
    3,325WEIGHTED AVERAGE INVESTING PARTNER
UNITS OUTSTANDING
    
    
    1,047.2
    
    
    
    1,053.1
    
    
    
    1,047.7
    
    
    
    1,053.2
 
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APACHE OFFSHORE INVESTMENT PARTNERSHIP
STATEMENT OF CONSOLIDATED CASH FLOWS
(Unaudited)
 For the Six Months Ended June 30,2007
    
    
    2006CASH FLOWS FROM OPERATING ACTIVITIES:Net income
    
    $
    2,248,196
    
    
    $
    4,550,801Adjustments to reconcile net income to net cash
provided by operating activities:Depreciation, depletion and amortization
    
    
    507,915
    
    
    
    842,273Asset retirement obligation accretion
    
    
    21,936
    
    
    
    20,696Changes in operating assets and liabilities:(Increase) decrease in accrued revenues receivable
    
    
    177,757
    
    
    
    901,299Increase (decrease) in accrued operating expenses
    
    
    (14,933
    )
    
    
    22,129Increase (decrease) in payable to/receivable from
Apache Corporation
    
    
    (19,290
    )
    
    
    307,080Net cash provided by operating activities
    
    
    2,921,581
    
    
    
    6,644,278CASH FLOWS FROM INVESTING ACTIVITIES:Additions to oil and gas properties
    
    
    (138,231
    )
    
    
    (538,466
    )Net cash used in investing activities
    
    
    (138,231
    )
    
    
    (538,466
    )CASH FLOWS FROM FINANCING ACTIVITIES:Repurchase of Partnership Units
    
    
    (55,568
    )
    
    
    (15,084
    )Distributions to Investing Partners
    
    
    (2,096,555
    )
    
    
    (3,686,932
    )Distributions to Managing Partner
    
    
    (574,676
    )
    
    
    (1,249,077
    )Net cash used in financing activities
    
    
    (2,726,799
    )
    
    
    (4,951,093
    )NET INCREASE IN CASH AND CASH EQUIVALENTS
    
    
    56,551
    
    
    
    1,154,719CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR
    
    
    2,358,999
    
    
    
    2,611,653CASH AND CASH EQUIVALENTS, END OF PERIOD
    
    $
    2,415,550
    
    
    $
    3,766,372
 
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APACHE OFFSHORE INVESTMENT PARTNERSHIP
CONSOLIDATED BALANCE SHEET
(Unaudited)
 June 30,
    
    
    December 31,2007
    
    
    2006ASSETSCURRENT ASSETS:Cash and cash equivalents
    
    $
    2,415,550
    
    
    $
    2,358,999Accrued revenues receivable
    
    
    355,420
    
    
    
    533,1772,770,970
    
    
    
    2,892,176OIL AND GAS PROPERTIES, on the basis of full cost accounting:Proved properties
    
    
    185,712,256
    
    
    
    185,574,025Less  Accumulated depreciation, depletion and amortization
    
    
    (180,345,002
    )
    
    
    (179,837,087
    )5,367,254
    
    
    
    5,736,938$
    8,138,224
    
    
    $
    8,629,114LIABILITIES AND PARTNERS CAPITALCURRENT LIABILITIES:Payable to Apache Corporation
    
    $
    155,263
    
    
    $
    174,553Accrued operating expenses
    
    
    72,673
    
    
    
    87,606227,936
    
    
    
    262,159ASSET RETIREMENT OBLIGATION
    
    
    764,092
    
    
    
    742,156PARTNERS CAPITAL:Managing Partner
    
    
    45,464
    
    
    
    75,272Investing Partners (1,044.0 and 1,048.3 units outstanding, respectively)
    
    
    7,100,732
    
    
    
    7,549,5277,146,196
    
    
    
    7,624,799$
    8,138,224
    
    
    $
    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
    
    
    21,936Asset retirement obligation at June 30, 2007
    
    $
    764,092
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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
    
    
    
    
    
    
    
    
    
    Increase2007
    
    2006
    
    (Decrease)
    
    2007
    
    2006
    
    (Decrease)Gas volume  Mcf per day
    
    
    1,465
    
    
    
    2,568
    
    
    
    (43
    %)
    
    
    1,644
    
    
    
    2,669
    
    
    
    (38
    %)Average gas price  per Mcf
    
    $
    7.73
    
    
    $
    7.01
    
    
    
    10
    %
    
    $
    7.45
    
    
    $
    8.04
    
    
    
    (7
    %)Oil volume  barrels per day
    
    
    114
    
    
    
    160
    
    
    
    (29
    %)
    
    
    116
    
    
    
    167
    
    
    
    (31
    %)Average oil price  per barrel
    
    $
    65.64
    
    
    $
    71.04
    
    
    
    (8
    %)
    
    $
    63.06
    
    
    $
    66.06
    
    
    
    (5
    %)NGL volume  barrels per day
    
    
    24
    
    
    
    45
    
    
    
    (47
    %)
    
    
    22
    
    
    
    48
    
    
    
    (54
    %)Average NGL price  per barrel
    
    $
    43.80
    
    
    $
    39.88
    
    
    
    10
    %
    
    $
    38.57
    
    
    $
    38.29
    
    
    
    1
    %
 Oil and Gas Sales
     5




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Operating Expenses
    Capital Resources and Liquidity
    6




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Capital Commitments
       
 ITEM 3  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
   7




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ITEM 4  CONTROLS AND PROCEDURES
  FORWARD-LOOKING STATEMENTS AND RISK
   8




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PART II  OTHER INFORMATION
 
 ITEM 1.
    
    LEGAL PROCEEDINGSNone.
 
 ITEM 1A.
    
    RISK FACTORSDuring the quarter ended June 30, 2007, there were no material changes from the risk
factors as previously disclosed in the Partnerships Form 10-K for the year ended
December 31, 2006.
 
 ITEM 2.
    
    UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
 a.
    
    Noneb.
    
    Nonec.
    
    The following table presents information on Units purchased during the
quarter ended June 30, 2007:
 Issuer Purchases of Equity SecuritiesTotal Numberof Units
    
    Average PricePeriod
    
    Purchased
    
    Paid Per UnitApril 1 to April 30, 2007
    
    None
    
    
    N/AMay 1 to May 31, 2007
    
    None
    
    
    N/AJune 1 to June 30, 2007
    
    
    4.25
    
    
    $
    12,507
    (1)
 
 (1)
    
    Before interest. Shares are purchased under terms of the Amended Partnership Agreement which had
previously been announced to Investing Partners in the Partnership. The Amended
Partnership Agreement contains limitations on the number of Units that can be repurchased
including a limit of 10 percent of the Outstanding Units on an annual basis. See Note 2
(Right of Presentment) to the Consolidated Financial Statements for total cash outlays
for Unit purchases during the quarter and additional limitations.
 
 ITEM 3.
    
    DEFAULTS UPON SENIOR SECURITIESNone.
 
 ITEM 4.
    
    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERSNone.
 
 ITEM 5.
    
    OTHER INFORMATIONNone.
 
 ITEM 6.
    
    EXHIBITS
 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, General PartnerDated: August 8, 2007
    /s/ Roger B. PlankRoger B. PlankExecutive Vice President and Chief Financial OfficerDated: August 8, 2007
    /s/ Rebecca A. HoytRebecca A. HoytVice President and Controller
(Chief Accounting Officer)




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Exhibit Index
 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