##### 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, 2010
 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 June 30, 2010
    
    1,022




---



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. EXHIBITSEX-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 Six MonthsEnded June 30,
    
    
    Ended June 30,2010
    
    
    2009
    
    
    2010
    
    
    2009REVENUES:Oil and gas sales
    
    $
    1,336,569
    
    
    $
    759,274
    
    
    $
    3,060,541
    
    
    $
    1,890,442Interest income
    
    
    7
    
    
    
    34
    
    
    
    11
    
    
    
    1641,336,576
    
    
    
    759,308
    
    
    
    3,060,552
    
    
    
    1,890,606EXPENSES:Depreciation, depletion and amortization
    
    
    233,350
    
    
    
    182,858
    
    
    
    593,723
    
    
    
    478,390Asset retirement obligation accretion
    
    
    29,130
    
    
    
    16,700
    
    
    
    59,116
    
    
    
    33,159Lease operating expenses
    
    
    256,827
    
    
    
    375,362
    
    
    
    509,872
    
    
    
    763,197Gathering and transportation costs
    
    
    24,296
    
    
    
    8,715
    
    
    
    58,242
    
    
    
    28,682Administrative
    
    
    109,250
    
    
    
    112,500
    
    
    
    218,500
    
    
    
    225,000652,853
    
    
    
    696,135
    
    
    
    1,439,453
    
    
    
    1,528,428NET INCOME
    
    $
    683,723
    
    
    $
    63,173
    
    
    $
    1,621,099
    
    
    $
    362,178NET INCOME ALLOCATED TO:Managing Partner
    
    $
    180,488
    
    
    $
    47,811
    
    
    $
    434,049
    
    
    $
    163,374Investing Partners
    
    
    503,235
    
    
    
    15,362
    
    
    
    1,187,050
    
    
    
    198,804$
    683,723
    
    
    $
    63,173
    
    
    $
    1,621,099
    
    
    $
    362,178NET INCOME PER INVESTING PARTNER UNIT
    
    $
    493
    
    
    $
    15
    
    
    $
    1,162
    
    
    $
    195WEIGHTED AVERAGE INVESTING PARTNER
UNITS OUTSTANDING
    
    
    1021.5
    
    
    
    1,021.5
    
    
    
    1021.5
    
    
    
    1,021.5
 
 1




---



##### Table of Contents



APACHE OFFSHORE INVESTMENT PARTNERSHIP
STATEMENT OF CONSOLIDATED CASH FLOWS
(Unaudited)
 For the Six MonthsEnded June 30,2010
    
    
    2009CASH FLOWS FROM OPERATING ACTIVITIES:Net income
    
    $
    1,621,099
    
    
    $
    362,178Adjustments to reconcile net income to net cash
provided by operating activities:Depreciation, depletion and amortization
    
    
    593,723
    
    
    
    478,390Asset retirement obligation accretion
    
    
    59,116
    
    
    
    33,159Dismantlement and abandonment cost
    
    
    (91,849
    )
    
    
    Changes in operating assets and liabilities:(Increase) decrease in accrued receivables
    
    
    90,867
    
    
    
    124,627Increase (decrease) in receivable from/payable to
Apache Corporation
    
    
    120,254
    
    
    
    (20,241
    )Increase (decrease) in accrued operating expenses
    
    
    26,839
    
    
    
    2,005Net cash provided by operating activities
    
    
    2,420,049
    
    
    
    980,118CASH FLOWS FROM INVESTING ACTIVITIES:Additions to oil and gas properties
    
    
    (75,011
    )
    
    
    (585,864
    )Net cash used in investing activities
    
    
    (75,011
    )
    
    
    (585,864
    )CASH FLOWS FROM FINANCING ACTIVITIES:Distributions to Investing Partners
    
    
    
    
    
    
    Distributions to Managing Partner
    
    
    (173,673
    )
    
    
    (172,661
    )Net cash used in financing activities
    
    
    (173,673
    )
    
    
    (172,661
    )NET INCREASE IN CASH AND CASH EQUIVALENTS
    
    
    2,171,365
    
    
    
    221,593CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR
    
    
    2,048,412
    
    
    
    1,131,615CASH AND CASH EQUIVALENTS, END OF PERIOD
    
    $
    4,219,777
    
    
    $
    1,353,208
 
 2




---



##### Table of Contents



APACHE OFFSHORE INVESTMENT PARTNERSHIP
CONSOLIDATED BALANCE SHEET
(Unaudited)
 June 30,
    
    
    December 31,2010
    
    
    2009ASSETSCURRENT ASSETS:Cash and cash equivalents
    
    $
    4,219,777
    
    
    $
    2,048,412Accrued revenues receivable
    
    
    228,867
    
    
    
    319,734Accrued insurance receivable
    
    
    24,678
    
    
    
    24,678Receivable from Apache Corporation
    
    
    
    
    
    
    82,9024,473,322
    
    
    
    2,475,726OIL AND GAS PROPERTIES, on the basis of full cost accounting:Proved properties
    
    
    188,696,354
    
    
    
    188,458,320Less  Accumulated depreciation, depletion and amortization
    
    
    (183,291,901
    )
    
    
    (182,698,178
    )5,404,453
    
    
    
    5,760,142$
    9,877,775
    
    
    $
    8,235,868LIABILITIES AND PARTNERS CAPITALCURRENT LIABILITIES:Payable to Apache Corporation
    
    $
    37,352
    
    
    $
    Accrued operating expenses
    
    
    133,244
    
    
    
    106,405Accrued exploration and development
    
    
    163,023
    
    
    
    333,619
    
    
    
    106,405ASSET RETIREMENT OBLIGATION
    
    
    2,011,162
    
    
    
    2,043,895PARTNERS CAPITAL:Managing Partner
    
    
    334,456
    
    
    
    74,080Investing Partners (1,021.5 units outstanding)
    
    
    7,198,538
    
    
    
    6,011,4887,532,994
    
    
    
    6,085,568$
    9,877,775
    
    
    $
    8,235,868
 
 3




---



##### Table of Contents



APACHE OFFSHORE INVESTMENT PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
   1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
  Use of Estimates
  2. RECEIVABLE FROM / PAYABLE TO APACHE CORPORATION
  3. RIGHT OF PRESENTMENT
  4




---



##### Table of Contents



4. ASSET RETIREMENT OBLIGATIONS
  Asset retirement obligation at December 31, 2009
    
    $
    2,043,895Accretion expense
    
    
    59,116Liabilities settled
    
    
    (91,849
    )Asset retirement obligation at June 30, 2010
    
    $
    2,011,162
  5. SUBSEQUENT EVENTS
  5




---



##### Table of Contents



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 30,2010
    
    2009
    
    Increase(Decrease)
    
    2010
    
    2009
    
    Increase(Decrease)Gas volume  Mcf per day
    
    
    1,793
    
    
    
    696
    
    
    
    157
    %
    
    
    1,915
    
    
    
    1,139
    
    
    
    68
    %Average gas price  per Mcf
    
    $
    4.46
    
    
    $
    3.42
    
    
    
    30
    %
    
    $
    5.09
    
    
    $
    4.53
    
    
    
    12
    %Oil volume  barrels per day
    
    
    81
    
    
    
    97
    
    
    
    (16
    %)
    
    
    87
    
    
    
    105
    
    
    
    (17
    %)Average oil price  per barrel
    
    $
    77.58
    
    
    $
    56.38
    
    
    
    38
    %
    
    $
    77.25
    
    
    $
    46.41
    
    
    
    66
    %NGL volume  barrels per day
    
    
    9
    
    
    
    17
    
    
    
    (47
    %)
    
    
    10
    
    
    
    16
    
    
    
    (38
    %)Average NGL price  per barrel
    
    $
    44.76
    
    
    $
    28.37
    
    
    
    58
    %
    
    $
    50.28
    
    
    $
    26.30
    
    
    
    91
    %
 Oil and Gas Sales
  6




---



##### Table of Contents



Operating Expenses
   7




---



##### Table of Contents



Capital Resources and Liquidity
        8




---



##### Table of Contents



Capital Commitments
        Potential Impact of Deepwater Horizon Explosion and Oil Spill on Gulf of Mexico Operations
  9




---



##### Table of Contents




    
    Third party review and certification of blowout preventers/shear rams
    
    Professional engineer certification of well plan and cement procedures
    
    Chief Executive Officer certification that the operator is in compliance with and is
conducting all operations in accordance with all operating regulations found at 30 CFR 250
  
    
    Detailed response plans for a blowout event including relief well rig availability and
timing to contract a rig, move it onsite and drill a relief well
    
    Calculation of Worst Case Discharge (WCD) scenario including all models, calculations
and assumptions used to calculate daily discharge rate
    
    Measures that operator would propose to enhance the ability to prevent or reduce the
likelihood of a blowout
   Insurance
   10




---



##### Table of Contents



Remediation Plans and Procedures
     
 ITEM 3   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
   11




---



##### Table of Contents



ITEM 4   CONTROLS AND PROCEDURES
 Disclosure Controls and Procedures
   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;
 12




---



##### Table of Contents




    
    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 Form 10-K.
  13




---



##### Table of Contents



PART II  OTHER INFORMATION
 
   
   Oil and gas operations involve a high degree of operational risk, particularly risk of
personal injury, damage or loss of equipment and environmental accidents.
  
    
    drilling well blowouts, explosions and cratering;
    
    pipeline ruptures and spills;
    
    fires;
    
    formations with abnormal pressures;
    
    equipment malfunctions; and
    
    hurricanes which could affect our operations in the Gulf of Mexico, as well as
other natural disasters.
  A drilling moratorium in the Gulf of Mexico, or other regulatory initiatives in response
to the current oil spill in the Gulf of Mexico, could adversely affect the Partnerships
business.
 ,
 14




---



##### Table of Contents



The
shut-in of production from our South Timbalier 295 field could have a
material adverse effect on our business, financial condition or
results of operations.
  
   
   
   
   
   *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. 15




---



##### Table of Contents



SIGNATURES
  APACHE OFFSHORE INVESTMENT PARTNERSHIPBy:
    Apache Corporation, Managing PartnerDated: August 6, 2010
    /s/  Roger B. PlankRoger B. PlankPresident (principal financial officer)
of Apache Corporation, Managing PartnerDated: August 6, 2010
    /s/  Rebecca A. HoytRebecca A. Hoyt
Vice President and Controller (principal accounting officer)
of Apache Corporation, Managing Partner