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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 Form 10-K
  þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 For the Fiscal Year Ended December 31, 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
 A Delaware
    
    IRS EmployerGeneral Partnership
    
    No. 41-1464066
 
  
 o þ
 o þ
 þ 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
 Aggregate market value of the voting and non-voting common
equity held by non-affiliates of registrant as of December
31, 2008
    
    $
    16,342,701




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##### 



TABLE OF CONTENTS
 DESCRIPTION
 Item
    
    
    
    PagePART I1.
    
    BUSINESS
    
    11A.
    
    RISK FACTORS
    
    31B.
    
    UNRESOLVED STAFF COMMENTS
    
    52.
    
    PROPERTIES
    
    53.
    
    LEGAL PROCEEDINGS
    
    74.
    
    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
    
    7PART II5.
    
    MARKET FOR THE PARTNERSHIPS SECURITIES AND RELATED
SECURITY HOLDER MATTERS
    
    86.
    
    SELECTED FINANCIAL DATA
    
    87.
    
    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
    
    97A.
    
    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
    
    158.
    
    FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
    
    179.
    
    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
    
    349A.
    
    CONTROLS AND PROCEDURES
    
    349B.
    
    OTHER INFORMATION
    
    34PART III10.
    
    DIRECTORS AND EXECUTIVE OFFICERS OF THE PARTNERSHIP
    
    3511.
    
    EXECUTIVE COMPENSATION
    
    3512.
    
    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
    
    3513.
    
    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
    
    3514.
    
    PRINCIPAL ACCOUNTANT FEES AND SERVICES
    
    35PART IV15.
    
    EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
    
    36EX-23.1EX-31.1EX-31.2EX-32.1




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PART I
 
 ITEM 1. BUSINESS
 General
       1




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2008 Results and Business Development
     Marketing
    2




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ITEM 1A. RISK FACTORS
  The Partnerships profitability and the carrying value of its properties is highly dependent on the
prices of crude oil, natural gas and natural gas liquids, which have historically been very
volatile.
   Our ability to sell natural gas and/or receive market prices for our gas may be adversely affected
by pipeline and gathering system capacity constraints and various transportation interruptions.
  Declining commodity prices may require the Partnership to reduce capital expenditures or
distributions to partners, or both, as cash from operating activities decline.
  The Partnership may not realize an adequate return on its drilling activities.
  
    
    unexpected drilling conditions;
    
    pressure or irregularities in formations;
 3




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
    
    equipment failures or accidents;
    
    fires, explosions, blow-outs and surface cratering;
    
    marine risks such as capsizing, collisions and hurricanes;
    
    other adverse weather conditions; and
    
    increase in cost of, or shortages or delays in the delivery of equipment.
  Our operations are subject to governmental risks that may impact our operations.
  Uncertainty in calculating reserves; rates of production; development expenditures; cash flows.
  Weather and climate may have a significant adverse impact on our revenues and productivity.
  The Partnership may incur significant costs related to environmental matters.
  We have limited control over the activities on properties we do not operate.
  4




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The Partnership faces significant industry competition.
  Insurance policies do not cover all risks.
   ITEM 1B. UNRESOLVED STAFF COMMENTS
   ITEM 2. PROPERTIES
 Acreage
  Developed AcreageLease Block
    
    State
    
    Gross Acres
    
    Net AcresShip Shoal 258, 259
    
    LA
    
    
    10,141
    
    
    
    638South Timbalier 276, 295, 296
    
    LA
    
    
    15,000
    
    
    
    1,063North Padre Island 969, 976
    
    TX
    
    
    10,080
    
    
    
    714Matagorda Island 681, 682
    
    TX
    
    
    10,840
    
    
    
    68146,061
    
    
    
    3,096
  Productive Oil and Gas Wells
  Gas
    
    OilLease Block
    
    State
    
    Gross
    
    Net
    
    Gross
    
    NetShip Shoal 258, 259
    
    LA
    
    
    7
    
    
    
    .44
    
    
    
    
    
    
    
    South Timbalier 276, 295, 296
    
    LA
    
    
    1
    
    
    
    .07
    
    
    
    23
    
    
    
    1.63North Padre Island 969, 976
    
    TX
    
    
    4
    
    
    
    .28
    
    
    
    
    
    
    
    Matagorda Island 681, 682
    
    TX
    
    
    4
    
    
    
    .25
    
    
    
    
    
    
    
    16
    
    
    
    1.04
    
    
    
    23
    
    
    
    1.63
 5




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##### Table of Contents



Net Wells Drilled
  Net Exploratory
    
    Net DevelopmentYear
    
    Productive
    
    Dry
    
    Total
    
    Productive
    
    Dry
    
    Total2008
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    .07
    
    
    
    .072007
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2006
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
 Production and Pricing Data
  Production
    
    Average
    
    Average Sales PricesYear Ended
    
    Oil
    
    Gas
    
    NGLs
    
    Production
    
    Oil
    
    Gas
    
    NGLsDecember 31,
    
    (Mbbls)
    
    (MMcf)
    
    (Mbbls)
    
    Cost per Mcfe
    
    (per Bbl)
    
    (per Mcf)
    
    (per Bbl)2008
    
    
    31
    
    
    
    468
    
    
    
    6
    
    
    $
    1.78
    
    
    $
    110.61
    
    
    $
    8.93
    
    
    $
    60.322007
    
    
    45
    
    
    
    555
    
    
    
    10
    
    
    
    1.69
    
    
    
    74.07
    
    
    
    7.10
    
    
    
    45.052006
    
    
    55
    
    
    
    795
    
    
    
    16
    
    
    
    1.08
    
    
    
    65.39
    
    
    
    7.58
    
    
    
    38.59
  Estimated Proved Reserves and Future Net Cash Flows
      6




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ITEM 3. LEGAL PROCEEDINGS
  
 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  7




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PART II
 
 ITEM 5.
    
    MARKET FOR THE PARTNERSHIPS SECURITIES AND RELATED SECURITY HOLDER MATTERS
    
 ITEM 6. SELECTED FINANCIAL DATA
  As of or For the Year Ended December 31,2008
    
    
    2007
    
    
    2006
    
    
    2005
    
    
    2004(In thousands, except per Unit amounts)Total assets
    
    $
    6,680
    
    
    $
    8,308
    
    
    $
    8,629
    
    
    $
    11,624
    
    
    $
    12,215Partners capital
    
    $
    5,191
    
    
    $
    6,960
    
    
    $
    7,625
    
    
    $
    10,311
    
    
    $
    11,293Oil and gas sales
    
    $
    7,928
    
    
    $
    7,679
    
    
    $
    10,255
    
    
    $
    14,779
    
    
    $
    13,874Net income
    
    $
    5,335
    
    
    $
    4,834
    
    
    $
    7,149
    
    
    $
    11,048
    
    
    $
    9,591Net income allocated to:Managing Partner
    
    $
    1,229
    
    
    $
    1,146
    
    
    $
    1,702
    
    
    $
    2,555
    
    
    $
    2,407Investing Partners
    
    
    4,106
    
    
    
    3,688
    
    
    
    5,447
    
    
    
    8,493
    
    
    
    7,184$
    5,335
    
    
    $
    4,834
    
    
    $
    7,149
    
    
    $
    11,048
    
    
    $
    9,591Net income per Investing
Partner Unit
    
    $
    3,976
    
    
    $
    3,531
    
    
    $
    5,178
    
    
    $
    8,048
    
    
    $
    6,786Cash distributions per
Investing Partner Unit
    
    $
    5,500
    
    
    $
    4,000
    
    
    $
    7,500
    
    
    $
    9,000
    
    
    $
    6,000
 8




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ITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 Overview
       9




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Results of Operations
  Net Income and Revenue
      For the Year Ended December 31,2008
    
    2007
    
    2006Gas volumes  Mcf per day
    
    
    1,277
    
    
    
    1,520
    
    
    
    2,178Average gas price  per Mcf
    
    $
    8.93
    
    
    $
    7.10
    
    
    $
    7.58Oil volumes  barrels per day
    
    
    84
    
    
    
    122
    
    
    
    152Average oil price  per barrel
    
    $
    110.61
    
    
    $
    74.07
    
    
    $
    65.39NGL volumes  barrels per day
    
    
    16
    
    
    
    26
    
    
    
    43Average NGL price  per barrel
    
    $
    60.32
    
    
    $
    45.05
    
    
    $
    38.59
 Year 2008 Compared to Year 2007
 Natural Gas and Crude Oil Sales
   10




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Operating Expenses
   Year 2007 Compared to Year 2006
 Natural Gas and Crude Oil Sales
   Operating Expenses
  Capital Resources and Liquidity
  11




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Capital Commitments
   12




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Off-Balance Sheet Arrangements
  Critical Accounting Policies and Estimates
  Full Cost Method of Accounting for Oil and Gas Operations
  13




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Reserve Estimates
    Asset Retirement Obligation (ARO)
    14




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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 Commodity Risk
      Forward-Looking Statements and Risk
  15




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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;
    
    the 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
this Form 10-K.
  16




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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
 APACHE OFFSHORE INVESTMENT PARTNERSHIP
INDEX TO FINANCIAL STATEMENTS
 PageNumberReport of Management on Internal Control over Financial Reporting
    
    18Report of Independent Registered Public Accounting Firm
    
    19Statement of Consolidated Income for each of the three years in the period ended December 31,
2008
    
    20Statement of Consolidated Cash Flows for each of the three years in the period ended
December 31, 2008
    
    21Consolidated Balance Sheet as of December 31, 2008 and 2007
    
    22Statement of Consolidated Changes in Partners Capital for each of the three years in the period
ended December 31, 2008
    
    23Notes to Consolidated Financial Statements
    
    24Supplemental Oil and Gas Disclosures
    
    31Supplemental Quarterly Financial Data
    
    33
   17




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REPORT OF MANAGEMENT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
    Internal
Control  Integrated Framework
 Chairman and Chief Executive Officer
(principal executive officer)
of Apache Corporation, Managing Partner
 President (principal financial officer)
of Apache Corporation, Managing Partner
 Vice President and Controller
(principal accounting officer)
of Apache Corporation, Managing Partner
 
 18




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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
      
 19




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APACHE OFFSHORE INVESTMENT PARTNERSHIP
 
 STATEMENT OF CONSOLIDATED INCOME
 For the Year Ended December 31,2008
    
    
    2007
    
    
    2006REVENUES:Oil and gas sales
    
    $
    7,927,690
    
    
    $
    7,679,104
    
    
    $
    10,254,559Interest income
    
    
    46,193
    
    
    
    104,274
    
    
    
    158,1407,973,883
    
    
    
    7,783,378
    
    
    
    10,412,699OPERATING EXPENSES:Depreciation, depletion and amortization
    
    
    901,633
    
    
    
    998,826
    
    
    
    1,482,299Asset retirement obligation accretion
    
    
    63,489
    
    
    
    44,522
    
    
    
    42,002Lease operating expenses
    
    
    1,153,688
    
    
    
    1,393,734
    
    
    
    1,183,159Gathering and transportation costs
    
    
    69,022
    
    
    
    96,082
    
    
    
    137,448Administrative
    
    
    451,154
    
    
    
    416,000
    
    
    
    419,0002,638,986
    
    
    
    2,949,164
    
    
    
    3,263,908NET INCOME
    
    $
    5,334,897
    
    
    $
    4,834,214
    
    
    $
    7,148,791NET INCOME ALLOCATED TO:Managing Partner
    
    $
    1,228,783
    
    
    $
    1,145,720
    
    
    $
    1,702,177Investing Partners
    
    
    4,106,114
    
    
    
    3,688,494
    
    
    
    5,446,614$
    5,334,897
    
    
    $
    4,834,214
    
    
    $
    7,148,791NET INCOME PER INVESTING PARTNER UNIT
    
    $
    3,976
    
    
    $
    3,531
    
    
    $
    5,178WEIGHTED AVERAGE INVESTING PARTNER
UNITS OUTSTANDING
    
    
    1,032.7
    
    
    
    1,044.5
    
    
    
    1,051.9
 
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APACHE OFFSHORE INVESTMENT PARTNERSHIP
  STATEMENT OF CONSOLIDATED CASH FLOWS
 For the Year Ended December 31,2008
    
    
    2007
    
    
    2006CASH FLOWS FROM OPERATING ACTIVITIES:Net income
    
    $
    5,334,897
    
    
    $
    4,834,214
    
    
    $
    7,148,791Adjustments to reconcile net income to net cash
provided by operating activities:Depreciation, depletion and amortization
    
    
    901,633
    
    
    
    998,826
    
    
    
    1,482,299Asset retirement obligation accretion
    
    
    63,489
    
    
    
    44,522
    
    
    
    42,002Changes in operating assets and liabilities:Decrease in accrued revenues receivable
    
    
    31,441
    
    
    
    170,918
    
    
    
    902,563Increase (decrease) in accrued operating
expense
    
    
    (139,712
    )
    
    
    150,712
    
    
    
    27,041Increase (decrease) in receivable/payable from
Apache Corporation
    
    
    195,645
    
    
    
    (123,581
    )
    
    
    531,823Net cash provided by operating activities
    
    
    6,387,393
    
    
    
    6,075,611
    
    
    
    10,134,519CASH FLOWS FROM INVESTING ACTIVITIES:Additions to oil and gas properties
    
    
    (956,051
    )
    
    
    (153,814
    )
    
    
    (369
    )Increase (decrease) in accrued development cost
    
    
    22,629
    
    
    
    
    
    
    
    (551,324
    )Net cash used in investing activities
    
    
    (933,422
    )
    
    
    (153,814
    )
    
    
    (551,693
    )CASH FLOWS FROM FINANCING ACTIVITIES:Repurchase of Partnership Units
    
    
    (228,995
    )
    
    
    (124,512
    )
    
    
    (57,312
    )Distributions to Investing Partners
    
    
    (5,679,725
    )
    
    
    (4,184,610
    )
    
    
    (7,895,978
    )Distributions to Managing Partner
    
    
    (1,195,521
    )
    
    
    (1,189,789
    )
    
    
    (1,882,190
    )Net cash used in financing activities
    
    
    (7,104,241
    )
    
    
    (5,498,911
    )
    
    
    (9,835,480
    )NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS
    
    
    (1,650,270
    )
    
    
    422,886
    
    
    
    (252,654
    )CASH AND CASH EQUIVALENTS, BEGINNING
OF YEAR
    
    
    2,781,885
    
    
    
    2,358,999
    
    
    
    2,611,653CASH AND CASH EQUIVALENTS, END OF YEAR
    
    $
    1,131,615
    
    
    $
    2,781,885
    
    
    $
    2,358,999
 
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APACHE OFFSHORE INVESTMENT PARTNERSHIP
 
 CONSOLIDATED BALANCE SHEET
 December 31,2008
    
    
    2007ASSETSCURRENT ASSETS:Cash and cash equivalents
    
    $
    1,131,615
    
    
    $
    2,781,885Accrued revenues receivable
    
    
    330,818
    
    
    
    362,2591,462,433
    
    
    
    3,144,144OIL AND GAS PROPERTIES, on the basis of full cost accounting:Proved properties
    
    
    186,955,531
    
    
    
    185,999,480Less  Accumulated depreciation, depletion and amortization
    
    
    (181,737,546
    )
    
    
    (180,835,913
    )5,217,985
    
    
    
    5,163,567$
    6,680,418
    
    
    $
    8,307,711LIABILITIES AND PARTNERS CAPITALCURRENT LIABILITIES:Accrued operating expense
    
    $
    98,606
    
    
    $
    238,318Accrued exploration and development
    
    
    22,629
    
    
    
    Payable to Apache Corporation
    
    
    246,617
    
    
    
    50,972367,852
    
    
    
    289,290ASSET RETIREMENT OBLIGATION
    
    
    1,121,808
    
    
    
    1,058,319COMMITMENTS AND CONTINGENCIES (Note 7)PARTNERS CAPITAL:Managing Partner
    
    
    64,465
    
    
    
    31,203Investing Partners (1,021.5 and 1,038.2 Units
outstanding, respectively)
    
    
    5,126,293
    
    
    
    6,928,8995,190,758
    
    
    
    6,960,102$
    6,680,418
    
    
    $
    8,307,711
 
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APACHE OFFSHORE INVESTMENT PARTNERSHIP
 
 STATEMENT OF CONSOLIDATED CHANGES IN PARTNERS CAPITAL
 Managing
    
    
    InvestingPartner
    
    
    Partners
    
    
    TotalBALANCE, DECEMBER 31, 2005
    
    $
    255,285
    
    
    $
    10,056,203
    
    
    $
    10,311,488Distributions
    
    
    (1,882,190
    )
    
    
    (7,895,978
    )
    
    
    (9,778,168
    )Repurchase of Partnership Units
    
    
    
    
    
    
    (57,312
    )
    
    
    (57,312
    )Net income
    
    
    1,702,177
    
    
    
    5,446,614
    
    
    
    7,148,791BALANCE, DECEMBER 31, 2006
    
    $
    75,272
    
    
    $
    7,549,527
    
    
    $
    7,624,799Distributions
    
    
    (1,189,789
    )
    
    
    (4,184,610
    )
    
    
    (5,374,399
    )Repurchase of Partnership Units
    
    
    
    
    
    
    (124,512
    )
    
    
    (124,512
    )Net income
    
    
    1,145,720
    
    
    
    3,688,494
    
    
    
    4,834,214BALANCE, DECEMBER 31, 2007
    
    $
    31,203
    
    
    $
    6,928,899
    
    
    $
    6,960,102Distributions
    
    
    (1,195,521
    )
    
    
    (5,679,725
    )
    
    
    (6,875,246
    )Repurchase of Partnership Units
    
    
    
    
    
    
    (228,995
    )
    
    
    (228,995
    )Net income
    
    
    1,228,783
    
    
    
    4,106,114
    
    
    
    5,334,897BALANCE, DECEMBER 31, 2008
    
    $
    64,465
    
    
    $
    5,126,293
    
    
    $
    5,190,758
 
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APACHE OFFSHORE INVESTMENT PARTNERSHIP
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (1) ORGANIZATION
 Nature of Operations 
      24




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APACHE OFFSHORE INVESTMENT PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 Right of Presentment 
    Right of Presentment
    
    Total Repurchase
    
    Repurchase PriceValuation Date
    
    Price
    
    Per UnitDecember 31, 2005
    
    $
    17,123,974
    
    
    $
    12,756June 30, 2006
    
    
    14,748,744
    
    
    
    10,016December 31, 2006
    
    
    15,207,303
    
    
    
    12,507June 30, 2007
    
    
    13,866,608
    
    
    
    11,282December 31, 2007
    
    
    15,806,599
    
    
    
    13,225June 30, 2008
    
    
    17,239,136
    
    
    
    13,245
 Investing Partner Units Outstanding:
    
    2008
    
    2007
    
    2006Balance, beginning of year
    
    
    1,038.2
    
    
    
    1,048.3
    
    
    
    1,053.4Repurchase of Partnership Units
    
    
    (16.7
    )
    
    
    (10.1
    )
    
    
    (5.1
    )Balance, end of year
    
    
    1,021.5
    
    
    
    1,038.2
    
    
    
    1,048.3
 Capital Contributions 
  25




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APACHE OFFSHORE INVESTMENT PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 (2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
  Statement Presentation 
  Cash Equivalents 
  Oil and Gas Properties 
     26




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APACHE OFFSHORE INVESTMENT PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 Revenue Recognition 
  Net Income Per Investing Unit 
  Income Taxes 
  Use of Estimates 
  Payable to Apache Corporation 
  Maintenance and Repairs 
  Shipping and Handling Costs 
  27




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APACHE OFFSHORE INVESTMENT PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 (3) COMPENSATION TO APACHE
  Total Reimbursed by the Investing Partnersfor the Year Ended December 31,2008
    
    
    2007
    
    
    2006(In thousands)a.
    
    
    Apache is reimbursed for general, administrative and
overhead expenses incurred in connection with the
management and operation of the Partnerships business
    
    $
    361
    
    
    $
    333
    
    
    $
    335b.
    
    
    Apache is reimbursed for development overhead costs
incurred in the Partnerships operations. These costs are
based on development activities and are capitalized to
oil and gas properties
    
    $
    26
    
    
    $
    7
    
    
    $
    
  (4) OIL AND GAS PROPERTIES
  2008
    
    
    2007
    
    
    2006(In thousands)Oil and Gas PropertiesBalance, beginning of year
    
    $
    185,999
    
    
    $
    185,574
    
    
    $
    185,574Costs incurred during the year:Development Investing Partners
    
    
    939
    
    
    
    319
    
    
    
    Managing Partner
    
    
    17
    
    
    
    106
    
    
    
    Balance, end of year
    
    $
    186,955
    
    
    $
    185,999
    
    
    $
    185,574
 Managing
    
    
    InvestingPartner
    
    
    Partners
    
    
    Total(In thousands)Accumulated Depreciation, Depletion and AmortizationBalance, December 31, 2005
    
    $
    20,892
    
    
    $
    157,463
    
    
    $
    178,355Provision
    
    
    1
    
    
    
    1,481
    
    
    
    1,482Balance, December 31, 2006
    
    $
    20,893
    
    
    $
    158,944
    
    
    $
    179,837Provision
    
    
    4
    
    
    
    995
    
    
    
    999Balance, December 31, 2007
    
    $
    20,897
    
    
    $
    159,939
    
    
    $
    180,836Provision
    
    
    16
    
    
    
    886
    
    
    
    902Balance, December 31, 2008
    
    $
    20,913
    
    
    $
    160,825
    
    
    $
    181,738
  28




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APACHE OFFSHORE INVESTMENT PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 (5) MAJOR CUSTOMER AND RELATED PARTIES INFORMATION
      (6) FINANCIAL INSTRUMENTS
  (7) COMMITMENTS AND CONTINGENCIES
 Litigation 
 Environmental 
 (8) ASSET RETIREMENT OBLIGATION
   29




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APACHE OFFSHORE INVESTMENT PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
  2008
    
    
    2007Asset retirement obligation at beginning of period
    
    $
    1,058,319
    
    
    $
    742,156Accretion expense
    
    
    63,489
    
    
    
    44,522Revisions in estimated liabilities
    
    
    
    
    
    
    271,641Asset retirement obligation at December 31
    
    $
    1,121,808
    
    
    $
    1,058,319
 (9) TAX-BASIS FINANCIAL INFORMATION
  2008
    
    
    2007
    
    
    2006Net partnership ordinary income for federal income
tax reporting purposes
    
    $
    5,184,702
    
    
    $
    5,475,029
    
    
    $
    8,176,253Plus: Items of current expense for tax reporting
purposes only Intangible drilling cost
    
    
    851,644
    
    
    
    35,699
    
    
    
    43,739Tax depreciation
    
    
    263,673
    
    
    
    366,834
    
    
    
    453,1001,115,317
    
    
    
    402,533
    
    
    
    496,839Less: full cost DD&A expense
    
    
    (901,633
    )
    
    
    (998,826
    )
    
    
    (1,482,299
    )Less: asset retirement obligation accretion
    
    
    (63,489
    )
    
    
    (44,522
    )
    
    
    (42,002
    )Net income
    
    $
    5,334,897
    
    
    $
    4,834,214
    
    
    $
    7,148,791
   December 31,2008
    
    
    2007Liabilities for federal income tax purposes
    
    $
    367,852
    
    
    $
    289,920Asset retirement liability
    
    
    1,121,808
    
    
    
    1,058,319Liabilities under accounting principles generally
accepted in the United States
    
    $
    1,489,660
    
    
    $
    1,348,239
  30




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APACHE
OFFSHORE INVESTMENT PARTNERSHIP
  SUPPLEMENTAL OIL AND GAS DISCLOSURES(UNAUDITED)
 Oil and Gas Reserve Information 
    2008
    
    2007
    
    2006Oil
    
    Gas
    
    Oil
    
    Gas
    
    Oil
    
    GasProved ReservesBeginning of year
    
    
    571
    
    
    
    3,004
    
    
    
    605
    
    
    
    3,433
    
    
    
    643
    
    
    
    4,538Extensions, discoveries and other additions
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Revisions of previous estimates
    
    
    (42
    )
    
    
    (114
    )
    
    
    20
    
    
    
    126
    
    
    
    33
    
    
    
    (310
    )Production
    
    
    (37
    )
    
    
    ( 468
    )
    
    
    (54
    )
    
    
    (555
    )
    
    
    (71
    )
    
    
    (795
    )End of year
    
    
    492
    
    
    
    2,422
    
    
    
    571
    
    
    
    3,004
    
    
    
    605
    
    
    
    3,433Proved DevelopedBeginning of year
    
    
    571
    
    
    
    2,899
    
    
    
    605
    
    
    
    3,328
    
    
    
    643
    
    
    
    4,433End of year
    
    
    492
    
    
    
    2,317
    
    
    
    571
    
    
    
    2,899
    
    
    
    605
    
    
    
    3,328
   31




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APACHE OFFSHORE INVESTMENT PARTNERSHIP
SUPPLEMENTAL OIL AND GAS DISCLOSURES  (Continued)
(UNAUDITED)
 Future Net Cash Flows 
  Discounted Future Net Cash Flows Relating to Proved Reserves
 December 31,2008
    
    
    2007
    
    
    2006(In thousands)Future cash inflows
    
    $
    36,059
    
    
    $
    70,569
    
    
    $
    54,599Future production costs
    
    
    (7,580
    )
    
    
    (8,710
    )
    
    
    (6,193
    )Future development costs
    
    
    (4,136
    )
    
    
    (4,421
    )
    
    
    (3,485
    )Net cash flows
    
    
    24,343
    
    
    
    57,438
    
    
    
    44,92110 percent annual discount rate
    
    
    (8,312
    )
    
    
    (25,539
    )
    
    
    (17,156
    )Discounted future net cash flows
    
    $
    16,031
    
    
    $
    31,899
    
    
    $
    27,765
  For the Year Ended December 31,2008
    
    
    2007
    
    
    2006(In thousands)Sales, net of production costs
    
    $
    (6,705
    )
    
    $
    (6,189
    )
    
    $
    (8,935
    )Net change in prices and production costs
    
    
    (13,629
    )
    
    
    10,719
    
    
    
    (8,315
    )Revisions of quantities
    
    
    (1,083
    )
    
    
    1,469
    
    
    
    (459
    )Accretion of discount
    
    
    3,190
    
    
    
    2,777
    
    
    
    4,160Changes in future development costs
    
    
    285
    
    
    
    (453
    )
    
    
    Changes in production rates and other
    
    
    2,074
    
    
    
    (4,189
    )
    
    
    (282
    )$
    (15,868
    )
    
    $
    4,134
    
    
    $
    (13,831
    )
 Impact of Pricing
  32




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APACHE OFFSHORE INVESTMENT PARTNERSHIP
  SUPPLEMENTAL QUARTERLY FINANCIAL DATA
 (UNAUDITED)
 First
    
    
    Second
    
    
    Third
    
    
    Fourth
    
    
    Total(In thousands, except per Unit amounts)2008Revenues
    
    $
    2,210
    
    
    $
    2,610
    
    
    $
    2,042
    
    
    $
    1,112
    
    
    $
    7,974Expenses
    
    
    602
    
    
    
    634
    
    
    
    739
    
    
    
    664
    
    
    
    2,639Net income
    
    $
    1,608
    
    
    $
    1,976
    
    
    $
    1,303
    
    
    $
    448
    
    
    $
    5,335Net income allocated to:Managing Partner
    
    $
    361
    
    
    $
    438
    
    
    $
    297
    
    
    $
    133
    
    
    $
    1,229Investing Partners
    
    
    1,247
    
    
    
    1,538
    
    
    
    1,006
    
    
    
    315
    
    
    
    4,106$
    1,608
    
    
    $
    1,976
    
    
    $
    1,303
    
    
    $
    448
    
    
    $
    5,335Net income per InvestingPartner Unit (1)
    
    $
    1,201
    
    
    $
    1,485
    
    
    $
    97
    
    
    
    7             $306
    
    
    $
    3,9762007Revenues
    
    $
    1,918
    
    
    $
    1,828
    
    
    $
    1,903
    
    
    $
    2,134
    
    
    $
    7,783Expenses
    
    
    640
    
    
    
    858
    
    
    
    646
    
    
    
    805
    
    
    
    2,949Net income
    
    $
    1,278
    
    
    $
    970
    
    
    $
    1,257
    
    
    $
    1,329
    
    
    $
    4,834Net income allocated to:Managing Partner
    
    $
    306
    
    
    $
    239
    
    
    $
    297
    
    
    $
    304
    
    
    $
    1,146Investing Partners
    
    
    972
    
    
    
    731
    
    
    
    960
    
    
    
    1,025
    
    
    
    3,688$
    1,278
    
    
    $
    970
    
    
    $
    1,257
    
    
    $
    1,329
    
    
    $
    4,834Net income per InvestingPartner Unit (1)
    
    $
    928
    
    
    $
    698
    
    
    $
    920
    
    
    $
    986
    
    
    $
    3,531
  (1)
    
    The sum of the individual net income per Investing Partner Unit may not agree with
the year-to-date net income per Investing Partner Unit as each quarterly computation is
based on the weighted average number of Investing Partner Units during that period. 33




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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
  
 ITEM 9A. CONTROLS AND PROCEDURES
 Disclosure Control and Procedures
  Report on Internal Control Over Financial Reporting
  Changes in Internal Control Over Financial Reporting
  
 ITEM 9B. OTHER INFORMATION
  34




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##### Table of Contents



PART III
 
 ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE PARTNERSHIP
  Code of Business Conduct
  
 ITEM 11. EXECUTIVE COMPENSATION
  
 ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
  
 ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
  
 ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
  35




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PART IV
 
 ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
 a.
    
    
    (1
    )
    
    Financial Statements  See accompanying index to financial statements in Item 8 above.(2
    )
    
    Financial Statement Schedules  See accompanying index to financial statements in Item
8 above.(3
    )
    
    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).10.1
    
    
    Form of Assignment and Assumption Agreement between Apache Corporation
and Apache Offshore Petroleum Limited Partnership (incorporated by reference to
Exhibit 10.2 to Partnerships Quarterly Report on Form 10-Q for the quarter ended
June 30, 1992, Commission File No. 0-13546).10.2
    
    
    Joint Venture Agreement, dated as of November 23, 1992, between Apache
Corporation and Apache Offshore Petroleum Limited Partnership (incorporated by
reference to Exhibit 10.6 to Partnerships Annual Report on Form 10-K for the year
ended December 31, 1992, Commission File No. 0-13546).10.3
    
    
    Matagorda Island 681 Field Purchase and Sale Agreement with Option to
Exchange, dated November 24, 1992, between Apache Corporation, Shell Offshore, Inc.
and SOI Royalties, Inc. (incorporated by reference to Exhibit 10.7 to Partnerships
Annual Report on Form 10-K for the year ended December 31, 1992, Commission File No.
0-13546).*23.1
    
    
    Consent of Ryder Scott Company, L.P., Petroleum Consultants.*31.1
    
    
    Certification of Principal Executive Officer.*31.2
    
    
    Certification of Principal Financial Officer.*32.1
    
    
    Certification of Principal Executive Officer and Principal Financial Officer.99.1
    
    
    Consent statement of the Partnership, dated January 7, 1994 (incorporated
by reference to Exhibit 99.1 to Partnerships Annual Report on Form 10-K for the
year ended December 31, 1993, Commission File No. 0-13546).99.2
    
    
    Proxy statement to be dated on or about March 30, 2009, relating to the
2009 annual meeting of stockholders of Apache Corporation (incorporated by reference
to the document filed by Apache pursuant to Rule 14A, Commission File No. 1-4300).
 
 *
    
    Filed herewith. b.
    
    See a (3) above.c.
    
    See a (2) above.
 36




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##### Table of Contents



SIGNATURES
  APACHE OFFSHORE INVESTMENT PARTNERSHIPBy:
    
    Apache Corporation, Managing PartnerDate: February 27, 2009
    
    By:
    
    /s/ G. Steven Farris

G. Steven FarrisChairman of the Board and Chief Executive Officer
 POWER OF ATTORNEY
   Name
    
    Title
    
    Date/s/ G. Steven Farris
    
    Chairman of the Board and Chief
    
    February 27, 2009G. Steven Farris
    
    Executive Officer(principal executive officer)/s/ Roger B. Plank

Roger B. Plank
    
    President (principal financial officer)
    
    February 27, 2009/s/ Rebecca A. Hoyt
    
    Vice President and Controller
    
    February 27, 2009Rebecca A. Hoyt
    
    (principal accounting officer)




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Name
    
    Title
    
    Date/s/ Frederick M. Bohen

Frederick M. Bohen
    
    Director
    
    February 27, 2009/s/ Randolph M. Ferlic

Randolph M. Ferlic
    
    Director
    
    February 27, 2009/s/ Eugene C. Fiedorek

Eugene C. Fiedorek
    
    Director
    
    February 27, 2009/s/ A. D. Frazier, Jr.

A. D. Frazier, Jr.
    
    Director
    
    February 27, 2009/s/ Patricia Albjerg Graham
    
    Director
    
    February 27, 2009Patricia Albjerg Graham/s/ John A. Kocur

John A. Kocur
    
    Director
    
    February 27, 2009/s/ George D. Lawrence

George D. Lawrence
    
    Director
    
    February 27, 2009/s/ F. H. Merelli

F. H. Merelli
    
    Director
    
    February 27, 2009/s/ Rodman D. Patton

Rodman D. Patton
    
    Director
    
    February 27, 2009/s/ Charles J. Pitman

Charles J. Pitman
    
    Director
    
    February 27, 2009