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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 September 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
    

Smaller
reporting company þ(Do not check if a Smaller reporting company)
 o þ
 Number of registrants units outstanding as of September 30, 2010
    
    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 30,2010
    
    
    2009
    
    
    2010
    
    
    2009REVENUES:Oil and gas sales
    
    $
    596,557
    
    
    $
    1,073,780
    
    
    $
    3,657,099
    
    
    $
    2,964,222Interest income
    
    
    14
    
    
    
    24
    
    
    
    25
    
    
    
    188596,571
    
    
    
    1,073,804
    
    
    
    3,657,124
    
    
    
    2,964,410EXPENSES:Depreciation, depletion and amortization
    
    
    111,051
    
    
    
    207,443
    
    
    
    704,774
    
    
    
    685,833Asset retirement obligation accretion
    
    
    29,507
    
    
    
    16,945
    
    
    
    88,623
    
    
    
    50,104Lease operating expenses
    
    
    265,887
    
    
    
    356,059
    
    
    
    775,759
    
    
    
    1,119,256Gathering and transportation costs
    
    
    42,970
    
    
    
    22,827
    
    
    
    101,213
    
    
    
    51,509Administrative
    
    
    109,250
    
    
    
    112,500
    
    
    
    327,750
    
    
    
    337,500558,665
    
    
    
    715,774
    
    
    
    1,998,119
    
    
    
    2,244,202NET INCOME
    
    $
    37,906
    
    
    $
    358,030
    
    
    $
    1,659,005
    
    
    $
    720,208NET INCOME ALLOCATED TO:Managing Partner
    
    $
    30,070
    
    
    $
    111,322
    
    
    $
    464,119
    
    
    $
    274,696Investing Partners
    
    
    7,836
    
    
    
    246,708
    
    
    
    1,194,886
    
    
    
    445,512$
    37,906
    
    
    $
    358,030
    
    
    $
    1,659,005
    
    
    $
    720,208NET INCOME PER INVESTING PARTNER UNIT
    
    $
    8
    
    
    $
    242
    
    
    $
    1,170
    
    
    $
    436WEIGHTED AVERAGE INVESTING PARTNER
UNITS OUTSTANDING
    
    
    1,021.5
    
    
    
    1,021.5
    
    
    
    1,021.5
    
    
    
    1,021.5
 
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APACHE OFFSHORE INVESTMENT PARTNERSHIP
STATEMENT OF CONSOLIDATED CASH FLOWS
(Unaudited)
 For the Nine MonthsEnded September 30,2010
    
    
    2009CASH FLOWS FROM OPERATING ACTIVITIES:Net income
    
    $
    1,659,005
    
    
    $
    720,208Adjustments to reconcile net income to net cash
provided by operating activities:Depreciation, depletion and amortization
    
    
    704,774
    
    
    
    685,833Asset retirement obligation accretion
    
    
    88,623
    
    
    
    50,104Dismantlement and abandonment cost
    
    
    (91,849
    )
    
    
    Changes in operating assets and liabilities:(Increase) decrease in accrued receivables
    
    
    197,913
    
    
    
    (5,230
    )Increase (decrease) in payable to
Apache Corporation
    
    
    163,942
    
    
    
    (176,798
    )Increase (decrease) in accrued operating expenses
    
    
    26,839
    
    
    
    28,619Net cash provided by operating activities
    
    
    2,749,247
    
    
    
    1,302,736CASH FLOWS FROM INVESTING ACTIVITIES:Additions to oil and gas properties
    
    
    (698,177
    )
    
    
    (609,560
    )Net cash used in investing activities
    
    
    (698,177
    )
    
    
    (609,560
    )CASH FLOWS FROM FINANCING ACTIVITIES:Distributions to Investing Partners
    
    
    
    
    
    
    Distributions to Managing Partner
    
    
    (224,193
    )
    
    
    (262,850
    )Net cash used in financing activities
    
    
    (224,193
    )
    
    
    (262,850
    )NET INCREASE IN CASH AND CASH EQUIVALENTS
    
    
    1,826,877
    
    
    
    430,326CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR
    
    
    2,048,412
    
    
    
    1,131,615CASH AND CASH EQUIVALENTS, END OF PERIOD
    
    $
    3,875,289
    
    
    $
    1,561,941
 
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APACHE OFFSHORE INVESTMENT PARTNERSHIP
CONSOLIDATED BALANCE SHEET
(Unaudited)
 September 30,
    
    
    December 31,2010
    
    
    2009ASSETSCURRENT ASSETS:Cash and cash equivalents
    
    $
    3,875,289
    
    
    $
    2,048,412Accrued revenues receivable
    
    
    121,821
    
    
    
    319,734Accrued insurance receivable
    
    
    24,678
    
    
    
    24,678Receivable from Apache Corporation
    
    
    
    
    
    
    82,9024,021,788
    
    
    
    2,475,726OIL AND GAS PROPERTIES, on the basis of full cost accounting:Proved properties
    
    
    189,496,674
    
    
    
    188,458,320Less  Accumulated depreciation, depletion and amortization
    
    
    (183,402,952
    )
    
    
    (182,698,178
    )6,093,722
    
    
    
    5,760,142$
    10,115,510
    
    
    $
    8,235,868LIABILITIES AND PARTNERS CAPITALCURRENT LIABILITIES:Payable to Apache Corporation
    
    $
    81,040
    
    
    $
    Accrued operating expenses
    
    
    133,244
    
    
    
    106,405Accrued exploration and development
    
    
    340,177
    
    
    
    554,461
    
    
    
    106,405ASSET RETIREMENT OBLIGATION
    
    
    2,040,669
    
    
    
    2,043,895PARTNERS CAPITAL:Managing Partner
    
    
    314,006
    
    
    
    74,080Investing Partners (1,021.5 units outstanding)
    
    
    7,206,374
    
    
    
    6,011,4887,520,380
    
    
    
    6,085,568$
    10,115,510
    
    
    $
    8,235,868
 
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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




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4. ASSET RETIREMENT OBLIGATIONS
  Asset retirement obligation at December 31, 2009
    
    $
    2,043,895Accretion expense
    
    
    88,623Liabilities settled
    
    
    (91,849
    )Asset retirement obligation at September 30, 2010
    
    $
    2,040,669
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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
    
    
    
    
    
    
    
    
    
    
    Increase2010
    
    
    2009
    
    
    (Decrease)
    
    
    2010
    
    
    2009
    
    
    (Decrease)Gas volume  Mcf per day
    
    
    1,195
    
    
    
    1,603
    
    
    
    (25
    )%
    
    
    1,672
    
    
    
    1,295
    
    
    
    29
    %Average gas price  per Mcf
    
    $
    4.51
    
    
    $
    3.20
    
    
    
    41
    %
    
    $
    4.95
    
    
    $
    3.97
    
    
    
    25
    %Oil volume  barrels per day
    
    
    12
    
    
    
    88
    
    
    
    (86
    )%
    
    
    62
    
    
    
    99
    
    
    
    (37
    )%Average oil price  per barrel
    
    $
    68.29
    
    
    $
    67.40
    
    
    
    1
    %
    
    $
    76.64
    
    
    $
    52.67
    
    
    
    46
    %NGL volume  barrels per day
    
    
    6
    
    
    
    19
    
    
    
    (68
    %)
    
    
    8
    
    
    
    17
    
    
    
    (53
    )%Average NGL price  per barrel
    
    $
    43.70
    
    
    $
    33.38
    
    
    
    31
    %
    
    $
    48.79
    
    
    $
    28.96
    
    
    
    68
    %
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Oil and Gas Sales
         Operating Expenses
  7




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Capital Resources and Liquidity
      8




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Capital Commitments
       9




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Potential Impact of Deepwater Horizon Explosion and Oil Spill on Gulf of Mexico Operations
    Insurance
    Remediation Plans and Procedures
   10




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ITEM 3   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
   
 ITEM 4   CONTROLS AND PROCEDURES
 Disclosure Controls and Procedures
   FORWARD-LOOKING STATEMENTS AND RISK
  11




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
    
    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
 
 ITEM 1.
    
    LEGAL PROCEEDINGS
 None.
 
 ITEM 1A.
    
    RISK FACTORS
 Please refer to the risk factors as previously disclosed in the Partnerships Annual
Report on Form 10-K for the year ended December 31, 2009. For the nine months ending
September 30, 2010, the Partnership notes the following additional risk factors:
 Oil and gas operations involve a high degree of operational risk, particularly risk of
personal injury, damage or loss of equipment and environmental accidents.
 The Partnerships operations are subject to hazards and risks inherent in the drilling,
production and transportation of crude oil and natural gas, including:
 
    
    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.
 Failure or loss of equipment, as the result of equipment malfunctions or natural
disasters, could result in property damages, personal injury, environmental pollution and
other damages for which the Partnership could be liable. Litigation arising from a
catastrophic occurrence, such as a well blowout, explosion or fire at a location where
our equipment and services are used, may result in substantial claims for damages.
Ineffective containment of a well blowout or pipeline rupture could result in
environmental pollution and substantial remediation expenses. If a significant amount of
our production is interrupted, our containment efforts prove to be ineffective or
litigation arises as the result of a catastrophic occurrence, our cash flow and, in turn,
our results of operations could be materially and adversely affected.
 The additional drilling laws and regulations, delays in processing of permits and other
related developments resulting from the recently lifted deepwater drilling moratorium in
the Gulf of Mexico could adversely affect the Partnerships business.
 As has been widely reported, in April 2010, a fire and explosion occurred onboard the
semisubmersible drilling rig Deepwater Horizon, leading to the oil spill currently
affecting the Gulf of Mexico. In response to this incident, the Minerals Management
Service (now known as the Bureau of Ocean Energy Management, Regulation and Enforcement,
or BOEM) of the U.S. Department of the Interior issued a notice on May 30, 2010
implementing a six-month moratorium on certain drilling activities in the Gulf of Mexico.
Implementation of the moratorium was blocked by a U.S. district court, which was
subsequently affirmed on appeal, but on July 12, 2010, the BOEM issued a new moratorium
that applies to drilling operations that use subsea blowout preventers or surface blowout
preventers on floating facilities,rather than a moratorium based on water depths. The
DOI lifted this moratorium on October 12, 2010. The BOEM is also expected to issue new
safety and environmental guidelines or regulations for drilling in the
Gulf of Mexico, and may take other steps that could increase the costs of exploration and
production, reduce the area of operations and result in permitting delays. Although it
is difficult to predict the ultimate impact of the moratorium or any new guidelines,
regulations or legislation, a prolonged suspension of drilling activity in the Gulf of
Mexico, new regulations and increased liability for companies operating in this sector
could adversely affect the Partnerships operations in the Gulf of Mexico.
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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.
 The Partnerships production from South Timbalier 295 has been shut-in since July 11,
2010, as a result of a leak in a third-party pipeline. It is anticipated that the
shut-in may be for a lengthy period of time waiting on regulatory approvals for the
required work and for completion of the repairs. The operator of the pipeline has
indicated that the line is not economical to them and that they will expect Apache and
the Partnership, as the only customers utilizing the pipeline, to pay for the
repairs. If we are unable to receive regulatory approvals for the completion
of the repairs in a timely manner or if the repairs are not completed for an extended
period, this shut-in could have a material adverse effect on the Partnerships financial
position, results of operations and our cash flows.
 
 ITEM 2.
    
    UNREGISTERED SALES OF EQUITY IN SECURITIES AND USE OF PROCEEDS
 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
 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 Partner Dated:      November 9, 2010
    / s / Roger B. PlankRoger B. Plank
President (principal financial officer)
of Apache Corporation, Managing Partner Dated:      November 9, 2010
    / s / Rebecca A. HoytRebecca A. Hoyt
Vice President and Controller 
(principal accounting officer)

of Apache Corporation, Managing Partner