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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, 2006
 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
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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 2. CHANGES IN SECURITIES, USE OF PROCEEDS AND ISSUER PURCHASES OF EQUITY SECURITIESITEM 3. DEFAULTS UPON SENIOR SECURITIESITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERSITEM 5. OTHER INFORMATIONITEM 6. EXHIBITS AND REPORTS ON FORM 8-KSIGNATURESCertification of CEOCertification of CFOCertification of CEO & CFO    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 31,2006
    
    
    2005REVENUES:Oil and gas sales
    
    $
    3,381,074
    
    
    $
    3,376,275Interest income
    
    
    32,632
    
    
    
    22,3883,413,706
    
    
    
    3,398,663EXPENSES:Depreciation, depletion and amortization
    
    
    451,663
    
    
    
    567,036Asset retirement obligation accretion
    
    
    10,273
    
    
    
    12,601Lease operating costs
    
    
    296,703
    
    
    
    307,921Gathering and transportation expense
    
    
    48,732
    
    
    
    42,824Administrative
    
    
    107,000
    
    
    
    107,000914,371
    
    
    
    1,037,382NET INCOME
    
    $
    2,499,335
    
    
    $
    2,361,281NET INCOME ALLOCATED TO:Managing Partner
    
    $
    574,426
    
    
    $
    568,413Investing Partners
    
    
    1,924,909
    
    
    
    1,792,868$
    2,499,335
    
    
    $
    2,361,281NET INCOME PER INVESTING PARTNER UNIT
    
    $
    1,827
    
    
    $
    1,698WEIGHTED AVERAGE INVESTING PARTNER
UNITS OUTSTANDING
    
    
    1,053.4
    
    
    
    1,055.7
 
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APACHE OFFSHORE INVESTMENT PARTNERSHIP
STATEMENT OF CONSOLIDATED CASH FLOWS
(Unaudited)
 For the Three MonthsEnded March 31,2006
    
    
    2005CASH FLOWS FROM OPERATING ACTIVITIES:Net income
    
    $
    2,499,335
    
    
    $
    2,361,281Adjustments to reconcile net income to net cash
provided by operating activities:Depreciation, depletion and amortization
    
    
    451,663
    
    
    
    567,036Asset retirement obligation accretion
    
    
    10,273
    
    
    
    12,601Changes in operating assets and liabilities:(Increase) decrease in accrued revenues receivable
    
    
    763,268
    
    
    
    211,469(Increase) decrease in receivable from/payable to
Apache Corporation
    
    
    373,376
    
    
    
    26,945Increase (decrease) in accrued operating expenses payable
    
    
    6,627
    
    
    
    25,033Net cash provided by operating activities
    
    
    4,104,542
    
    
    
    3,204,365CASH FLOWS FROM INVESTING ACTIVITIES:Additions to oil and gas properties
    
    
    (518,323
    )
    
    
    (9,744
    )Net cash used in investing activities
    
    
    (518,323
    )
    
    
    (9,744
    )CASH FLOWS FROM FINANCING ACTIVITIES:Distributions to Investing Partners
    
    
    (3,686,932
    )
    
    
    (4,222,585
    )Distributions to Managing Partner
    
    
    (730,964
    )
    
    
    (631,006
    )Net cash used in financing activities
    
    
    (4,417,896
    )
    
    
    (4,853,591
    )NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS
    
    
    (831,677
    )
    
    
    (1,658,970
    )CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR
    
    
    2,611,653
    
    
    
    3,333,640CASH AND CASH EQUIVALENTS, END OF PERIOD
    
    $
    1,779,976
    
    
    $
    1,674,670
 
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APACHE OFFSHORE INVESTMENT PARTNERSHIP
CONSOLIDATED BALANCE SHEET
(Unaudited)
 March 31,
    
    
    December 31,2006
    
    
    2005ASSETSCURRENT ASSETS:Cash and cash equivalents
    
    $
    1,779,976
    
    
    $
    2,611,653Accrued revenues receivable
    
    
    672,472
    
    
    
    1,435,740Receivable from Apache Corporation
    
    
    
    
    
    
    357,2702,452,448
    
    
    
    4,404,663OIL AND GAS PROPERTIES, on the basis of full cost accounting:Proved properties
    
    
    185,597,561
    
    
    
    185,573,656Less  Accumulated depreciation, depletion and amortization
    
    
    (178,806,451
    )
    
    
    (178,354,788
    )6,791,110
    
    
    
    7,218,868$
    9,243,558
    
    
    $
    11,623,531LIABILITIES AND PARTNERS CAPITALCURRENT LIABILITIES:Payable to Apache Corporation
    
    $
    16,106
    
    
    $
    Accrued exploration and development
    
    
    56,906
    
    
    
    551,324Accrued operating expenses
    
    
    67,192
    
    
    
    60,565140,204
    
    
    
    611,889ASSET RETIREMENT OBLIGATION
    
    
    710,427
    
    
    
    700,154PARTNERS CAPITAL:Managing Partner
    
    
    98,747
    
    
    
    255,285Investing Partners (1,053.4 units outstanding)
    
    
    8,294,180
    
    
    
    10,056,2038,392,927
    
    
    
    10,311,488$
    9,243,558
    
    
    $
    11,623,531
 
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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, 2005
    
    $
    700,154Accretion expense
    
    
    10,273Asset retirement obligation at March 31, 2006
    
    $
    710,427
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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,
    
    Increase2006
    
    2005
    
    (Decrease)Gas volume  Mcf per day
    
    
    2,772
    
    
    
    3,472
    
    
    
    (20
    %)Average gas price  per Mcf
    
    $
    9.01
    
    
    $
    6.71
    
    
    
    34
    %Oil volume  barrels per day
    
    
    174
    
    
    
    253
    
    
    
    (31
    %)Average oil price  per barrel
    
    $
    61.43
    
    
    $
    48.03
    
    
    
    28
    %Natural gas liquids (NGL) volume  barrels per day
    
    
    52
    
    
    
    66
    
    
    
    (21
    %)Average NGL price  per barrel
    
    $
    36.90
    
    
    $
    30.80
    
    
    
    20
    %
 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
 
 ITEM 1.
    
    LEGAL PROCEEDINGS
 None.
 
 ITEM 2.
    
    CHANGES IN SECURITIES, USE OF PROCEEDS AND ISSUER PURCHASES OF EQUITY SECURITIES
 None.
 
 ITEM 3.
    
    DEFAULTS UPON SENIOR SECURITIES
 None.
 
 ITEM 4.
    
    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
 None.
 
 ITEM 5.
    
    OTHER INFORMATION
 None.
 
 ITEM 6.
    
    EXHIBITS AND REPORTS ON FORM 8-K
 a. Exhibits
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SIGNATURES
  APACHE OFFSHORE INVESTMENT PARTNERSHIPBy:    Apache Corporation, General PartnerDated: May 8, 2006
    
    /s/ Roger B. PlankRoger B. PlankExecutive Vice President and Chief Financial OfficerDated: May 8, 2006
    
    /s/ Thomas L. MitchellThomas L. MitchellVice President and Controller(Chief Accounting Officer)




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Exhibit Index