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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, 2008
 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 Central 
2000 Post Oak Boulevard, Houston, TX
    
    77056-4400(Address of Principal Executive Offices)
    
    (Zip Code)
   þ 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




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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 4T  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 30,2008
    
    
    2007
    
    
    2008
    
    
    2007REVENUES:Oil and gas sales
    
    $
    2,027,808
    
    
    $
    1,870,931
    
    
    $
    6,821,015
    
    
    $
    5,565,260Interest income
    
    
    14,517
    
    
    
    32,105
    
    
    
    41,519
    
    
    
    83,7682,042,325
    
    
    
    1,903,036
    
    
    
    6,862,534
    
    
    
    5,649,028EXPENSES:Depreciation, depletion and amortization
    
    
    209,517
    
    
    
    249,533
    
    
    
    668,669
    
    
    
    757,448Asset retirement obligation accretion
    
    
    15,986
    
    
    
    11,211
    
    
    
    47,269
    
    
    
    33,147Lease operating expenses
    
    
    354,715
    
    
    
    255,896
    
    
    
    861,691
    
    
    
    959,343Gathering and transportation costs
    
    
    20,664
    
    
    
    22,011
    
    
    
    51,526
    
    
    
    72,509Administrative
    
    
    138,000
    
    
    
    107,000
    
    
    
    346,000
    
    
    
    321,000738,882
    
    
    
    645,651
    
    
    
    1,975,155
    
    
    
    2,143,447NET INCOME
    
    $
    1,303,443
    
    
    $
    1,257,385
    
    
    $
    4,887,379
    
    
    $
    3,505,581NET INCOME ALLOCATED TO:Managing Partner
    
    $
    297,483
    
    
    $
    296,888
    
    
    $
    1,096,013
    
    
    $
    841,755Investing Partners
    
    
    1,005,960
    
    
    
    960,497
    
    
    
    3,791,366
    
    
    
    2,663,826$
    1,303,443
    
    
    $
    1,257,385
    
    
    $
    4,887,379
    
    
    $
    3,505,581NET INCOME PER INVESTING PARTNER UNIT
    
    $
    977
    
    
    $
    920
    
    
    $
    3,665
    
    
    $
    2,545WEIGHTED AVERAGE INVESTING PARTNER
UNITS OUTSTANDING
    
    
    1,029.5
    
    
    
    1,044.0
    
    
    
    1,034.5
    
    
    
    1,046.5
 
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APACHE OFFSHORE INVESTMENT PARTNERSHIP
STATEMENT OF CONSOLIDATED CASH FLOWS
(Unaudited)
 For the Nine Months EndedSeptember 30,2008
    
    
    2007CASH FLOWS FROM OPERATING ACTIVITIES:Net income
    
    $
    4,887,379
    
    
    $
    3,505,581Adjustments to reconcile net income to net cash
provided by operating activities:Depreciation, depletion and amortization
    
    
    668,669
    
    
    
    757,448Asset retirement obligation accretion
    
    
    47,269
    
    
    
    33,147Changes in operating assets and liabilities:(Increase) decrease in accrued revenues receivable
    
    
    105,217
    
    
    
    221,933Increase (decrease) in receivable from/payable to
Apache Corporation
    
    
    150,131
    
    
    
    (296,887
    )Increase (decrease) in accrued operating expenses
    
    
    (120,509
    )
    
    
    17,195Net cash provided by operating activities
    
    
    5,738,156
    
    
    
    4,238,417CASH FLOWS FROM INVESTING ACTIVITIES:Additions to oil and gas properties
    
    
    (198,496
    )
    
    
    (146,488
    )Net cash used in investing activities
    
    
    (198,496
    )
    
    
    (146,488
    )CASH FLOWS FROM FINANCING ACTIVITIES:Repurchase of Partnership Units
    
    
    (119,227
    )
    
    
    (55,568
    )Distributions to Investing Partners
    
    
    (2,076,388
    )
    
    
    (2,096,555
    )Distributions to Managing Partner
    
    
    (1,084,143
    )
    
    
    (881,792
    )Net cash used in financing activities
    
    
    (3,279,758
    )
    
    
    (3,033,915
    )NET INCREASE IN CASH AND CASH EQUIVALENTS
    
    
    2,259,902
    
    
    
    1,058,014CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR
    
    
    2,781,885
    
    
    
    2,358,999CASH AND CASH EQUIVALENTS, END OF PERIOD
    
    $
    5,041,787
    
    
    $
    3,417,013
 
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APACHE OFFSHORE INVESTMENT PARTNERSHIP
CONSOLIDATED BALANCE SHEET
(Unaudited)
 September 30,
    
    
    December 31,2008
    
    
    2007ASSETSCURRENT ASSETS:Cash and cash equivalents
    
    $
    5,041,787
    
    
    $
    2,781,885Accrued revenues receivable
    
    
    257,042
    
    
    
    362,2595,298,829
    
    
    
    3,144,144OIL AND GAS PROPERTIES, on the basis of full cost accounting:Proved properties
    
    
    186,454,638
    
    
    
    185,999,480Less  Accumulated depreciation, depletion and amortization
    
    
    (181,504,582
    )
    
    
    (180,835,913
    )4,950,056
    
    
    
    5,163,567$
    10,248,885
    
    
    $
    8,307,711LIABILITIES AND PARTNERS CAPITALCURRENT LIABILITIES:Distributions payable
    
    $
    3,603,337
    
    
    $
    Payable to Apache Corporation
    
    
    201,103
    
    
    
    50,972Accrued exploration and development
    
    
    256,662
    
    
    
    Accrued operating expenses
    
    
    117,809
    
    
    
    238,3184,178,911
    
    
    
    289,290ASSET RETIREMENT OBLIGATION
    
    
    1,105,588
    
    
    
    1,058,319PARTNERS CAPITAL:Managing Partner
    
    
    43,073
    
    
    
    31,203Investing Partners (1,029.5 and 1,038.2 units outstanding respectively)
    
    
    4,921,313
    
    
    
    6,928,8994,964,386
    
    
    
    6,960,102$
    10,248,885
    
    
    $
    8,307,711
 
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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, 2007
    
    $
    1,058,319Accretion expense
    
    
    47,269Asset retirement obligation at September 30, 2008
    
    $
    1,105,588
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5




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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
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For the Quarter Ended September 30,
    
    
    For the Nine Months Ended September 30,Increase
    
    
    
    
    
    
    
    
    
    
    Increase2008
    
    
    2007
    
    
    (Decrease)
    
    
    2008
    
    
    2007
    
    
    (Decrease)Gas volume  Mcf per day
    
    
    1,190
    
    
    
    1,428
    
    
    
    (17
    )%
    
    
    1,172
    
    
    
    1,571
    
    
    
    (25
    )%Average gas price  per Mcf
    
    $
    10.10
    
    
    $
    6.14
    
    
    
    64
    %
    
    $
    9.98
    
    
    $
    7.05
    
    
    
    42
    %Oil volume  barrels per day
    
    
    72
    
    
    
    128
    
    
    
    (44
    )%
    
    
    104
    
    
    
    120
    
    
    
    (13
    )%Average oil price  per barrel
    
    $
    126.20
    
    
    $
    77.16
    
    
    
    64
    %
    
    $
    115.72
    
    
    $
    68.13
    
    
    
    70
    %NGL volume  barrels per day
    
    
    14
    
    
    
    31
    
    
    
    (55
    )%
    
    
    22
    
    
    
    25
    
    
    
    (12
    %)Average NGL price  per barrel
    
    $
    69.08
    
    
    $
    53.05
    
    
    
    30
    %
    
    $
    55.00
    
    
    $
    44.68
    
    
    
    23
    %
 Oil and Gas Sales
 th
      Operating Expenses
  7




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Capital Resources and Liquidity
      Capital Commitments
   8




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ITEM 3  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
   9




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ITEM 4T  CONTROLS AND PROCEDURES
 Disclosure Controls and Procedures
  Changes in Internal Control over Financial Reporting
  FORWARD-LOOKING STATEMENTS AND RISK
   10




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PART II  OTHER INFORMATION
 
   
   
   
   
   
   
   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 PARTNERSHIPBy:
    Apache Corporation, Managing PartnerDated:  November 10, 2008
    /s/  Roger B. PlankRoger B. PlankExecutive Vice President and Chief Financial OfficerDated:  November 10, 2008
    /s/  Rebecca A. HoytRebecca A. HoytVice President and Controller

(Chief Accounting Officer)