<PAGE>
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-K


           [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                   For the Fiscal Year Ended December 31, 2001

                                       OR

          [ ] 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 Employer
        General Partnership                                No. 41-1464066

                              One Post Oak Central
                       2000 Post Oak Boulevard, Suite 100
                            Houston, Texas 77056-4400

                         Telephone Number (713) 296-6000


        SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: NONE


           SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
                                PARTNERSHIP UNITS


         Indicate by check mark whether the Partnership (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
Partnership was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

                                          YES    X              NO
                                               -----                 ----

         Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of Partnership's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K.  X
                            -----

                      DOCUMENTS INCORPORATED BY REFERENCE:

         Portions of Apache Corporation's proxy statement relating to its 2002
annual meeting of shareholders have been incorporated by reference into Part III
hereof.

<PAGE>
                                TABLE OF CONTENTS

                                   DESCRIPTION


<Table>
<Caption>
ITEM                                                                       PAGE
----                                                                       ----
<S>                                                                        <C>
                                     PART I
   1.   BUSINESS...........................................................   1
   2.   PROPERTIES.........................................................   5
   3.   LEGAL PROCEEDINGS..................................................   6
   4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS................   6

                                     PART II

   5.   MARKET FOR THE PARTNERSHIP'S SECURITIES AND RELATED
             SECURITY HOLDER MATTERS.......................................   7
   6.   SELECTED FINANCIAL DATA............................................   7
   7.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
             CONDITION AND RESULTS OF OPERATIONS...........................   8
  7A.   MARKET RISK........................................................  11
   8.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA........................  12
   9.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
             ACCOUNTING AND FINANCIAL DISCLOSURE...........................  28

                                    PART III

  10.   DIRECTORS AND EXECUTIVE OFFICERS OF THE PARTNERSHIP................  28
  11.   EXECUTIVE COMPENSATION.............................................  28
  12.   SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
             AND MANAGEMENT................................................  28
  13.   CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.....................  28

                                     PART IV

  14.   EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K....  29
</Table>

         All defined terms under Rule 4-10(a) of Regulation S-X shall have their
statutorily-prescribed meanings when used in this report. Quantities of natural
gas are expressed in this report in terms of thousand cubic feet (Mcf), million
cubic feet (MMcf) or billion cubic feet (Bcf). Oil is quantified in terms of
barrels (bbls), thousands of barrels (Mbbls) and millions of barrels (MMbbls).
Natural gas is compared to oil in terms of barrels of oil equivalent (boe) or
million barrels of oil equivalent (MMboe). Oil and natural gas liquids are
compared with natural gas in terms of million cubic feet equivalent (MMcfe) and
billion cubic feet equivalent (Bcfe). One barrel of oil is the energy equivalent
of six Mcf of natural gas. Daily oil and gas production is expressed in terms of
barrels of oil per day (bopd) and thousands of cubic feet of gas per day (Mcfd),
respectively. With respect to information relating to the Partnership's working
interest in wells or acreage, "net" oil and gas wells or acreage is determined
by multiplying gross wells or acreage by the Partnership's working interest
therein. Unless otherwise specified, all references to wells and acres are
gross.


<PAGE>

                                     PART I


ITEM 1. BUSINESS

GENERAL

     Apache Offshore Investment Partnership (the Investment Partnership), a
Delaware general partnership, was organized in October 1983, with public
investors as Investing Partners and Apache Corporation (Apache), a Delaware
corporation, as Managing Partner. The operations of the Investment Partnership
are conducted by Apache Offshore Petroleum Limited Partnership (the Limited
Partnership), a Delaware limited partnership, of which Apache is the sole
general partner and the Investment Partnership is the sole limited partner.

     The Investing Partners purchased Units of Partnership Interests (Units) in
the Investment Partnership at $150,000 per Unit, with five percent down and the
balance in payments as called by the Investment Partnership. As of December 31,
2001, a total of $85,000 had been called for each Unit. In 1989, the Investment
Partnership determined that the full $150,000 per Unit was not needed, fixed the
total calls at $85,000 per Unit, and released the Investing Partners from
liability for future calls. The Investment Partnership invested, and will
continue to invest, its entire capital in the Limited Partnership. As used
hereafter, the term "Partnership" refers to either the Investment Partnership or
the Limited Partnership, as the case may be.

     The Partnership's business is participation in oil and gas exploration,
development and production activities on federal lease tracts in the Gulf of
Mexico, offshore Louisiana and Texas. Except for the Matagorda Island Block 681
and 682 interests, as described below, the Partnership acquired its oil and gas
interests through the purchase of 85 percent of the working interests held by
Apache as a participant in a venture (the Venture) with Shell Oil Company
(Shell) and certain other companies. The Partnership owns working interests
ranging from 6.29 percent to 9.44 percent in the Venture's properties.

     The Venture acquired substantially all of its oil and gas properties
through bidding for leases offered by the federal government. The Venture
members relied on Shell's knowledge and expertise in determining bidding
strategies for the acquisitions. When Shell was successful in obtaining the
properties, it generally billed participating members on a promoted basis
(one-third for one-quarter) for the acquisition of exploratory leases and on a
straight-up basis for the acquisition of leases defined as drainage tracts. All
such billings were proportionately reduced to each member's working interest.

     In November 1992, Apache and the Partnership formed a joint venture to
acquire Shell's 92.6 percent working interest in Matagorda Island Blocks 681 and
682 pursuant to a jointly-held contractual preferential right to purchase.
Apache and the Partnership previously owned working interests in the blocks
equal to 1.109 percent and 6.287 percent, respectively, and net revenue
interests of .924 percent and 5.239 percent, respectively. To facilitate the
acquisition, Apache and the Partnership contributed all of their interests in
Matagorda Island Blocks 681 and 682 to a newly formed joint venture, and Apache
contributed $64.6 million ($55.6 million net of purchase price adjustments) to
the joint venture to finance the acquisition. The Partnership had neither the
cash nor additional financing to fund its proportionate share of the acquisition
and participated through an increased net revenue interest in the joint venture.

     Under the terms of the joint venture agreement, the Partnership's effective
net revenue interest in the Matagorda Island Block 681 and 682 properties
increased to 13.284 percent as a result of the acquisition, while its working
interest was unchanged. The acquisition added approximately 7.5 Bcf of natural
gas and 16 Mbbls of oil to the Partnership's reserve base without any
incremental expenditures by the Partnership.

     Since the Venture is not expected to acquire any additional exploratory
acreage, future acquisitions, if any, will be confined to those leases defined
as drainage tracts. The current Venture members would pay their proportionate
share of acquiring any drainage tracts on a non-promoted basis.

     Offshore exploration differs from onshore exploration in that production
from a prospect generally will not commence until a sufficient number of
productive wells have been drilled to justify the significant costs associated
with construction of a production platform. Exploratory wells usually are
drilled from mobile platforms until there are sufficient indications of
commercial production to justify construction of a permanent production
platform.


                                       1
<PAGE>

     Apache, as Managing Partner, manages the Partnership's operations. Apache
uses a portion of its staff and facilities for this purpose and is reimbursed
for actual costs paid on behalf of the Partnership, as well as for general,
administrative and overhead costs properly allocable to the Partnership.

2001 BUSINESS DEVELOPMENT

     During 2001, the Partnership participated in drilling four development
wells at South Timbalier 295, all of which were completed as producing wells.
With the completion of the new wells in 2001 and additional drilling planned in
the field in 2002, the Partnership also participated in the construction of a
new production platform at South Timbalier 295. The Partnership continued to
participate in recompletion projects to maintain production and enhance
recoverable reserves. During 2001, the Partnership participated in recompletion
projects at South Timbalier 295, Matagorda Island 681/682 and East Cameron 60.

     The Partnership earned an overriding royalty interest in an exploratory
well drilled by a third-party at Matagorda Island 682 during 2001 under a
farmout agreement. The well was completed as a successful well in late 2001, but
had not been brought on production as of the end of the year. Under the terms of
the farmout agreement, the Partnership also earned a right to participate as a
working interest owner in future drilling at Matagorda Island Block 683.

     Since inception, the Partnership has acquired an interest in 49 prospects.
As of December 31, 2001, 42 of those prospects have been surrendered or sold.

     The status of the Partnership's 49 original prospects is shown in the
following table:

<Table>
<Caption>
                                                 AS OF DECEMBER 31,
                                               ---------------------
                                                2001            2000
                                               ------          -----
<S>                                            <C>             <C>
                  Prospect Status

                  Producing - developed            7               7
                  Surrendered/sold                42              42
                                               -----           -----

                  Total                           49              49
                                               =====           =====
</Table>

     As of December 31, 2001, 125 wells have been drilled on the seven remaining
prospects. Of the 125 wells, 99 were productive and of those, 51 are currently
producing. Two of the Partnership's producing wells are dual completions. The
Partnership had, at December 31, 2001, estimated proved oil and gas reserves of
12.4 Bcfe, of which 57 percent was natural gas.

MARKETING

     Apache, on behalf of the Partnership, seeks and negotiates oil and gas
marketing arrangements with various marketers and purchasers. During 2001, the
Partnership's spot market gas was purchased primarily by Cinergy Marketing and
Trading, LLC. The Partnership's oil and condensate production during 2001 was
purchased largely by Apache Crude Oil Marketing, Inc. (ACOM), a wholly-owned
subsidiary of Apache.

     In 1998, Apache sold its interest in Producers Energy Marketing LLC
(ProEnergy) (a gas marketing company formed by Apache and other natural gas
producers) to Cinergy Corp., with ProEnergy being renamed Cinergy Marketing &
Trading, LLC (Cinergy). In July 1998, in connection with the sale of its
interest, Apache entered into a gas purchase agreement with Cinergy to market
most of its U.S. natural gas production for a ten-year period, with an option,
after prior notice, to terminate after six years. Apache also sells most of the
Partnership's natural gas production to Cinergy under the gas purchase
agreement. The prices the Partnership receives for its gas production, in the
opinion of Apache, approximate market prices.

     During 2001, ACOM purchased oil and condensate from the Partnership which
accounted for approximately 26 percent of the Partnership's total oil and gas
sales. The prices the Partnership received for these sales were based on
third-party pricing indexes and, in the opinion of Apache, were comparable to
prices that would have been received from a non-affiliated party.


                                       2
<PAGE>

     See Note (5) "Major Customer and Related Parties Information" to the
Partnership's financial statements under Item 8. Because the Partnership's oil
and gas products are commodities and the prices and terms of its sales reflect
those of the market, the Partnership does not believe that the loss of any
customer would have a material adverse affect on the Partnership's business or
results of operations. The Partnership is not in a position to predict future
oil and gas prices.

RISK FACTORS RELATED TO THE PARTNERSHIP'S BUSINESS AND OPERATIONS

WRITE-DOWNS UNDER THE FULL COST CEILING TEST RULES COULD REDUCE THE REPORTED
VALUE OF PROPERTIES

     Under the full cost accounting rules of the Securities and Exchange
Commission (SEC), the Partnership reviews the carrying value of its oil and gas
properties each quarter. Under these rules, capitalized costs of proved oil and
gas properties, net of accumulated depreciation, depletion and amortization, may
not exceed the present value of estimated future net cash flows from proved oil
and gas reserves, discounted at 10 percent, plus the lower of cost or fair
market value of unproved properties included in the costs being amortized, if
any. Application of these rules generally requires pricing future production at
the unescalated oil and gas prices in effect at the end of each fiscal quarter
and requires a write-down if the "ceiling" is exceeded, even if prices declined
for only a short period of time. The Partnership had no write-downs during 2001,
2000 or 1999 due to ceiling test limitations. Given the volatility of oil and
gas prices, it is reasonably possible that the Partnership's estimate of
discounted future net cash flows from proved oil and gas reserves could change
in the near term. If oil and gas prices decline significantly, even if only for
a short period of time, it is possible that write-downs of oil and gas
properties could occur in the future.

VOLATILE PRICES CAN MATERIALLY AFFECT THE PARTNERSHIP

     The Partnership continually analyzes forecasts and updates its estimates of
energy prices for its internal use in planning, budgeting, and estimating and
valuing reserves. The Partnership's future financial condition and results of
operations will depend upon the prices received for the Partnership's oil and
natural gas production and the costs of acquiring, finding, developing and
producing reserves. Prices for oil and natural gas are subject to fluctuations
in response to relatively minor changes in supply, market uncertainty and a
variety of additional factors that are beyond the control of the Partnership.
These factors include worldwide political instability (especially in the Middle
East and other oil-producing regions), the foreign supply of oil and gas, the
price of foreign imports, the level of drilling activity, the level of consumer
product demand, government regulations and taxes, the price and availability of
alternative fuels and the overall economic environment. A substantial or
extended decline in oil and gas prices would have a material adverse effect on
the Partnership's financial position, results of operations, quantities of oil
and gas that may be economically produced, and access to capital. Oil and
natural gas prices have historically been and are likely to continue to be
volatile. This volatility makes it difficult to estimate with precision the
value of producing properties in acquisitions and to budget and project the
return on exploration and development projects involving the Partnership's oil
and gas properties.

UNCERTAINTY IN CALCULATING RESERVES; RATES OF PRODUCTION; DEVELOPMENT
EXPENDITURES; CASH FLOWS

    There are numerous uncertainties inherent in estimating quantities of oil
and natural gas reserves of any category and in projecting future rates of
production and timing of development expenditures, which underlie the reserve
estimates, including many factors beyond the Partnership's control. Reserve data
represent only estimates. In addition, the estimates of future net cash flows
from the Partnership's proved reserves and their present value are based upon
various assumptions about future production levels, prices and costs that may
prove to be incorrect over time. Any significant variance from the assumptions
could result in the actual quantity of the Partnership's reserves and future net
cash flows from them being materially different from the estimates. In addition,
the Partnership's estimated reserves may be subject to downward or upward
revision based upon production history, results of future exploration and
development, prevailing oil and gas prices, operating and development costs and
other factors.

SUBSTANTIAL COSTS INCURRED RELATED TO ENVIRONMENTAL MATTERS

     The Partnership, as an owner or lessee of interests in oil and gas
properties, is subject to various federal, state and local laws and regulations
relating to the discharge of materials into, and protection of, the environment.
These laws and regulations may, among other things, impose liability on the
lessee under an oil and gas lease for the cost of pollution clean-up resulting
from operations, subject the lessee to liability for pollution damages and
require suspension or cessation of operations in affected areas.


                                       3
<PAGE>

     The Partnership has made and will continue to make expenditures in its
efforts to comply with these requirements. These costs are inextricably
connected to normal operating expenses such that the Partnership is unable to
separate the expenses related to environmental matters; however, the Partnership
does not believe such expenditures are material to its financial position or
results of operations.

     The Partnership does not believe that compliance with federal, state or
local provisions regulating the discharge of materials into the environment, or
otherwise relating to the protection of the environment, will have a material
adverse effect upon the capital expenditures, earnings and the competitive
position of the Partnership, but there is no assurance that changes in or
additions to laws or regulations regarding the protection of the environment
will not have such an impact.

INSURANCE DOES NOT COVER ALL RISKS

     Exploration for and production of oil and natural gas can be hazardous,
involving unforeseen occurrences such as blowouts, cratering, fires and loss of
well control, which can result in damage to or destruction of wells or
production facilities, injury to persons, loss of life, or damage to property or
the environment. Apache, as managing partner, maintains insurance against
certain losses or liabilities arising from the Partnership's operations in
accordance with customary industry practices and in amounts that management
believes to be prudent; however, insurance is not available to the Partnership's
against all operational risks.

COMPETITION WITH OTHER COMPANIES COULD HARM THE PARTNERSHIP

     The Partnership is a very minor factor in the oil and gas industry in the
Gulf of Mexico area and faces strong competition from much larger producers for
the marketing of its oil and gas. The Partnership's ability to compete for
purchasers and favorable marketing terms will depend on the general demand for
oil and gas from Gulf of Mexico producers. More particularly, it will depend
largely on the efforts of Apache to find the best markets for the sale of the
Partnership's oil and gas production.


                                       4
<PAGE>

ITEM 2. PROPERTIES

ACREAGE

     Acreage is held by the Partnership pursuant to the terms of various leases.
The Partnership does not anticipate any difficulty in retaining any of its
desirable leases. A summary of the Partnership's gross and net acreage as of
December 31, 2001, is set forth below:

<Table>
<Caption>
                                                                                  DEVELOPED ACREAGE
                                                                            ----------------------------
               LEASE BLOCK                   PROSPECT            STATE      GROSS ACRES       NET ACRES
               -----------                   --------            -----      -----------       ----------
<S>                                          <C>                <C>         <C>               <C>
         Ship Shoal 258, 259                 Genesis               LA            10,141              638
         South Timbalier 276, 295, 296       Grover                LA            15,000            1,063
         North Padre Island 969, 976         Rosita                TX            10,080              714
         Matagorda Island 681, 682, 683      Roberto               TX            15,840              742
         South Pass 83                       Manx                  LA             5,000              339
         East Cameron 60                     East Aragonite        LA             5,000              472
         Ship Shoal 201, 202                 Bromeliad             LA            10,000               --
                                                                                -------           ------

                                                                                 71,061            3,968
                                                                                =======           ======
</Table>

     At December 31, 2001, the Partnership did not have an interest in any
undeveloped acreage.

PRODUCTIVE OIL AND GAS WELLS

     The number of productive oil and gas wells in which the Partnership had an
interest as of December 31, 2001, is set forth below:

<Table>
<Caption>
                                                                            GAS                      OIL
                                                                     -----------------        ----------------
          LEASE BLOCK                  PROSPECT        STATE         GROSS         NET        GROSS        NET
          -----------                  --------        -----         -----         ---        -----        ---
<S>                                   <C>             <C>           <C>          <C>         <C>        <C>
     Ship Shoal 258, 259               Genesis            LA             5         .25           --         --
     South Timbalier 276, 295, 296     Grover             LA             1         .07           26       1.70
     North Padre Island 969, 976       Rosita             TX             7         .50           --         --
     Matagorda Island 681, 682, 683    Roberto            TX             7         .44           --         --
     South Pass 83                     Manx               LA             4         .27           --         --
     East Cameron 60                   East Aragonite     LA            --          --           --         --
     Ship Shoal 201, 202               Bromeliad          LA            --          --            1         --
                                                                      ----        ----         ----       ----

                                                                        24        1.53           27       1.70
                                                                      ====        ====         ====       ====
</Table>

NET WELLS DRILLED

     The following table shows the results of the oil and gas wells drilled and
tested for each of the last three fiscal years.

<Table>
<Caption>
                                 NET EXPLORATORY                                NET DEVELOPMENT
     ----------      -----------------------------------------     ------------------------------------------
        YEAR          PRODUCTIVE        DRY          TOTAL         PRODUCTIVE         DRY           TOTAL
     ----------      -------------   -----------  ------------     ------------   -------------  ------------
<S>                  <C>             <C>          <C>              <C>            <C>            <C>
        2001                --            --           --              .28              --           .28
        2000                --            --           --              .28             .06           .34
        1999                --           .07          .07              .17              --           .17
</Table>


                                       5
<PAGE>

PRODUCTION AND PRICING DATA

     The following table describes, for each of the last three fiscal years, oil
and gas production for the Partnership, average production costs (excluding
severance taxes) and average sales prices.

<Table>
<Caption>
                                     PRODUCTION                                      AVERAGE SALES PRICES
                              --------------------------        AVERAGE           ---------------------------
           YEAR ENDED           OIL             GAS            PRODUCTION            OIL             GAS
          DECEMBER 31,        (Mbbls)          (MMcf)         COST PER Mcfe       (PER Bbl)       (PER Mcf)
          --------------      ----------     -----------     ----------------     -----------     -----------
<S>                           <C>            <C>             <C>                 <C>              <C>
              2001                 112            1,705          $     .27        $   24.99       $     4.42
              2000                 119            2,320                .18            30.16             3.81
              1999                 122            2,938                .18            18.10             2.15
</Table>

     See the Supplemental Oil and Gas Disclosures under Item 8 for estimated
proved oil and gas reserves quantities.

ITEM 3. LEGAL PROCEEDINGS

     There are no material legal proceedings pending to which the Partnership is
a party or to which the Partnership's interests are subject.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     There were no matters submitted to a vote of security holders during the
fourth quarter of 2001.


                                       6
<PAGE>

                                     PART II


ITEM 5. MARKET FOR THE PARTNERSHIP'S SECURITIES AND RELATED SECURITY HOLDER
        MATTERS

     As of December 31, 2001, there were 1,110.3 of the Partnership's Units
outstanding held by 910 investors of record. The Partnership has no other class
of security outstanding or authorized. The Units are not traded on any security
market. Cash distributions to Investing Partners totaled approximately $4.5
million, or $4,000 per Unit, during 2001 and approximately $6.5 million, or
$5,750 per Unit, during 2000.

     As discussed in Item 7, an amendment to the Partnership Agreement in
February 1994 created a right of presentment under which all Investing Partners
have a limited and voluntary right to offer their Units to the Partnership twice
each year to be purchased for cash.

ITEM 6. SELECTED FINANCIAL DATA

     The following selected financial data for the five years ended December 31,
2001, should be read in conjunction with the Partnership's financial statements
and related notes included under Item 8.

<Table>
<Caption>
                                          AS OF OR FOR THE YEAR ENDED DECEMBER 31,
                                      -----------------------------------------------
                                       2001      2000      1999      1998      1997
                                      -------   -------   -------   -------   -------
                                          (In thousands, except per Unit amounts)
<S>                                   <C>       <C>       <C>       <C>       <C>
Total assets                          $ 9,413   $ 8,715   $ 8,722   $ 9,841   $10,524
                                      =======   =======   =======   =======   =======

Partners' capital                     $ 8,369   $ 7,728   $ 7,755   $ 9,080   $ 8,647
                                      =======   =======   =======   =======   =======

Oil and gas sales                     $10,347   $12,417   $ 8,521   $ 7,827   $12,067
                                      =======   =======   =======   =======   =======

Net income                            $ 7,264   $ 8,497   $ 4,351   $ 3,621   $ 8,244
                                      =======   =======   =======   =======   =======

Net income allocated to:
    Managing Partner                  $ 1,731   $ 2,102   $ 1,269   $ 1,061   $ 1,967
    Investing Partners                  5,533     6,395     3,082     2,560     6,277
                                      -------   -------   -------   -------   -------

                                      $ 7,264   $ 8,497   $ 4,351   $ 3,621   $ 8,244
                                      =======   =======   =======   =======   =======

Net income per Investing
    Partner Unit                      $ 4,922   $ 5,654   $ 2,707   $ 2,193   $ 5,260
                                      =======   =======   =======   =======   =======

Cash distributions per
    Investing Partner Unit            $ 4,000   $ 5,750   $ 3,500   $ 1,500   $ 4,500
                                      =======   =======   =======   =======   =======
</Table>


                                       7
<PAGE>

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

     The Partnership's net income and net income per Investing Partner Unit
decreased in 2001 due to lower oil and gas production and lower oil prices.
Natural depletion on the Partnership's aging properties drove the 26 percent
decline in daily gas volumes and five percent drop in daily oil production from
last year. Distributions per Investing Partner Unit in 2001 also decreased as a
result of the lower production and oil prices.

RESULTS OF OPERATIONS

NET INCOME AND REVENUE

     The Partnership reported net income of $7.3 million for 2001 versus $8.5
million in 2000. Net income per Investing Partner Unit declined from $5,654 in
2000 to $4,922 in 2001. Lower oil and gas production and oil prices during 2001
drove the decline in net income and net income per unit from 2000.

     Revenues decreased from $12.5 million in 2000 to $10.4 million in 2001. The
17 percent decline primarily reflected the decline in production and oil prices
during 2001. Interest income earned by the Partnership on short-term cash
investments declined from last year primarily due to lower interest rates in
2001. Natural gas sales accounted for 72 percent of the Partnership's total
revenue in 2001, compared to 71 percent during 2000. The Partnership is not in a
position to predict future oil and gas prices.

     The Partnership's oil and gas production volume and price information is
summarized in the following table:

<Table>
<Caption>
                                                             FOR THE YEAR ENDED
                                                                DECEMBER 31,
                                                      -----------------------------------       INCREASE
                                                           2001               2000             (DECREASE)
                                                      ----------------   ----------------    ----------------
<S>                                                   <C>                <C>                  <C>
          Gas volumes - Mcf per day                        4,672              6,337                (26%)
          Average gas price - per Mcf                    $  4.42            $  3.81                 16%
          Oil volume - barrels per day                       307                324                 (5%)
          Average oil price - per barrel                 $ 24.99            $ 30.16                (17%)
</Table>

     Declines in oil and gas production can be expected in future years due to
normal depletion. It is not anticipated that the Partnership will acquire any
additional exploratory leases or that significant exploratory drilling will take
place on leases in which the Partnership currently holds interests.

2001 COMPARED TO 2000

OIL AND GAS SALES

     Natural gas sales for 2001 of $7.5 million declined 15 percent from 2000 as
lower gas production more than offset the impact of higher gas prices. Gas
production in 2001 decreased by 26 percent when compared to 2000, negatively
impacting sales by $2.7 million. Production decreases in 2001 were due to
natural production declines impacting all of the Partnership's properties. These
decreases were partially offset by production added from drilling projects at
South Timbalier 295 during 2001. The Partnership's average realized gas price
increased $.61 per Mcf from last year, positively impacting sales by $1.4
million. While the Partnership's average gas price was up from a year ago,
natural gas prices trended downward during most of 2001, and the Partnership
realized its lowest gas prices of 2001 during the fourth quarter.

     The Partnership's crude oil sales for 2001 totaled $2.8 million, a 22
percent decrease from 2000. The average realized price for 2001 decreased $5.17
per barrel, or 17 percent, when compared to the $30.16 per barrel realized last
year. Oil production in 2001 declined five percent from a year ago due to
natural depletion.

     During December 2001, the operator of North Padre Island 969, Apache and
the Partnership shut-in production from the North Padre Island field due to a
dispute with a pipeline company on increased fees charged for the transportation
of natural gas. Apache and the operator are currently negotiating with the
Federal Energy Regulatory


                                       8
<PAGE>
Commission and the pipeline company on acceptable transportation rates. During
the fourth quarter of 2001, production from East Cameron 60 was shut-in due to
increased water production from the field. The operator of the field is
currently reviewing workover or recompletion options. The results of the
pipeline fee negotiations and the evaluation of the East Cameron 60 field may
negatively impact future production rates, net income and cash flow.

     Given the small number of producing wells owned by the Partnership, and the
fact that offshore wells tend to decline at a faster rate than onshore wells,
the Partnership's future production will be subject to more volatility than
those companies with greater reserves and longer-lived properties. At December
31, 2001, South Timbalier Block 295 accounted for approximately 66 percent of
the Partnership's projected remaining equivalent proved reserves and 61 percent
of discounted future net cash flows relating to proved reserves.

OPERATING EXPENSES

     The Partnership's depreciation, depletion and amortization (DD&A) rate,
expressed as a percentage of oil and gas sales, was approximately 20 percent
during 2001. The DD&A rate decreased from last year as a result of reserve
additions recognized in 2001. Overall, the 2001 DD&A expense of $2 million
decreased approximately $.9 million when compared to 2000.

     Lease operating expense during 2001 of $.6 million increased by
approximately $.1 million from last year due to higher repair and maintenance
costs in 2001. Administrative expense declined 11 percent from last year,
falling to slightly less than $.5 million in 2001.

2000 COMPARED TO 1999

OIL AND GAS SALES

     Natural gas sales for 2000 totaled $8.8 million, up 40 percent over 1999,
as higher gas prices more than offset the impact of lower gas production. The
Partnership's average realized gas price increased $1.66 per Mcf from 1999,
positively impacting sales by $4.9 million. Gas production in 2000 decreased by
21 percent when compared to 1999, negatively impacting sales by $2.4 million.
Production decreases in 2000 were primarily due to natural production declines
at Matagorda 681, and the Partnership taking less than its entitled share of
production at Ship Shoal 259 and North Padre Island 969 to make-up gas
imbalances with another working-interest owner. These decreases were partially
offset by production added from a sidetrack well completed at East Cameron 60 in
late 1999 and drilling projects at South Timbalier 295 during 2000.

     The Partnership's crude oil sales for 2000 totaled $3.6 million, a 62
percent increase from 1999. The average realized price for 2000 increased $12.06
per barrel, or 67 percent, when compared to 1999. Oil production in 2000 slipped
three percent from a year ago due to natural depletion.

OPERATING EXPENSES

     The Partnership's DD&A rate, expressed as a percentage of oil and gas
sales, was approximately 24 percent during 2000, down from 1999. The decrease in
the DD&A rate was a result of reserve additions and favorable reserve revisions
recognized in 2000. Overall, the Partnership's 2000 DD&A expense of $3 million
decreased approximately $.1 million from 1999.

     Lease operating expense of $.5 million declined by approximately $.1
million during 2000 when compared to 1999 due to lower repair and maintenance
costs and the receipt of an audit exception refund from an outside operator in
2000. Administrative expense declined slightly from 1999.

CASH FLOW, LIQUIDITY AND CAPITAL RESOURCES

CAPITAL COMMITMENTS

     The Partnership's primary needs for cash are for operating expenses,
drilling and recompletion expenditures, future dismantlement and abandonment
costs, distributions to Investing Partners, and the purchase of Units offered by
Investing Partners under the right of presentment. The Partnership had no
outstanding debt at December 31, 2001.


                                       9
<PAGE>

     During 2001, the Partnership's oil and gas property additions totaled $3
million. These additions primarily related to drilling projects at South
Timbalier 295, the construction of an additional production platform at South
Timbalier 295 and recompletion projects in three fields. During 2001, the
Partnership participated in drilling four development wells at South Timbalier
295, all of which were completed as producing wells. The Partnership
participated in recompletion projects during 2001 at South Timbalier 295,
Matagorda Island 681/682 and at East Cameron 60. Additions to oil and gas
properties totaled $3.9 million and $1.4 million in 2000 and 1999, respectively.

     The Partnership anticipates capital expenditures will total approximately
$2 million in 2002, based on preliminary information provided by the operators
of the properties in which the Partnership owns interests. The anticipated
capital expenditures relate primarily to drilling and recompletion activity at
South Timbalier Block 295. Additional capital expenditures may be proposed by
the operators in the future. Estimates of future capital expenditures may also
change based on realized oil and gas prices, drilling results and the cost
charged by service providers.

     During 2001, the Partnership paid distributions to Investing Partners
totaling approximately $4.5 million or $4,000 per Unit. The per Unit
distribution in 2001 declined 30 percent from a year ago due to the decline in
the Partnership's revenues in 2001. Apache, as Managing Partner, will review the
possibility of distributions in 2002 given current revenues and available cash
balances. Due to the low oil and gas prices currently being realized by the
Partnership and planned capital expenditures at South Timbalier 295, the
Partnership is not expected to make a cash distribution during the first half of
2002. Distributions during the second half of 2002 and future years will be
dependent on actual and expected production levels, realized and expected oil
and gas prices, anticipated capital expenditures, and prudent cash reserves for
future dismantlement and abandonment costs that will be incurred after the
Partnership's reserves are depleted.

     The Partnership estimates that its share of future dismantlement and
abandonment costs will total approximately $1 million. These expenditures will
be funded by future cash flows from operations and cash held by the Partnership.

     In February 1994, an amendment to the Partnership Agreement created a right
of presentment under which all Investing Partners have a limited and voluntary
right to offer their Units to the Partnership twice each year to be purchased
for cash. In 2001, the first right of presentment offer of $9,928 per Unit, plus
interest to the date of payment, was made to Investing Partners based on a
December 31, 2000 valuation date. The second right of presentment offer of
$10,460 per Unit, plus interest to the date of payment, was made to the
Investing Partners based on a valuation date of June 30, 2001. As a result, the
Partnership acquired 18.2 Units for a total of $195,221 in cash. In 2000 and
1999, Investing Partners were paid $34,831 and $69,386, respectively, for a
total of 12.5 Units.

     There will be two rights of presentment in 2002, but the Partnership is not
in a position to predict how many Units will be presented for repurchase and
cannot, at this time, determine if the Partnership will have sufficient funds
available to repurchase Units. The Amended Partnership Agreement contains
limitations on the number of Units that the Partnership can repurchase,
including an annual limit on repurchases of 10 percent of outstanding Units. The
Partnership has no obligation to repurchase any Units presented to the extent
that it determines that it has insufficient funds for such repurchases.

CAPITAL RESOURCES AND LIQUIDITY

     The Partnership's primary capital resource is net cash provided by
operating activities, which totaled $10.2 million for 2001. Net cash provided by
operating activities in 2001 decreased $1 million, or nine percent, from a year
ago due to declines in oil and gas production and oil prices. Future operating
cash flows will be influenced by oil and gas prices and production which cannot
be predicted.

     The Partnership's future financial condition and results of operations will
largely depend upon prices received for its oil and natural gas production and
the costs of acquiring, finding, developing and producing reserves. A
substantial portion of the Partnership's production is sold under
market-sensitive contracts. Prices for oil and natural gas are subject to
fluctuations in response to changes in supply, market uncertainty and a variety
of factors beyond the Partnership's control. These factors include worldwide
political instability (especially in the Middle East), the foreign supply of oil
and natural gas, the price of foreign imports, the level of consumer demand and
the price and availability of alternative fuels. With natural gas accounting for
72 percent of the Partnership's 2001 production and 57 percent of total proved


                                       10
<PAGE>

reserves, on an energy equivalent basis, the Partnership is affected more by
fluctuations in natural gas prices than in oil prices.

     It is expected that the net cash provided by operating activities will be
sufficient to meet the Partnership's liquidity needs for routine operations over
the next two years. However, in the event that future short-term operating cash
requirements are greater than the Partnership's financial resources, the
Partnership may seek short-term, interest-bearing advances from the Managing
Partner as needed.

FORWARD-LOOKING STATEMENTS AND RISK

     Certain statements in this report, including statements of the future
plans, objectives, and expected performance of the Partnership, are
forward-looking statements that are dependent upon certain events, risks and
uncertainties that may be outside the Partnership's control, and which could
cause actual results to differ materially from those anticipated. Some of these
include, but are not limited to, the market prices of oil and gas, economic and
competitive conditions, inflation rates, legislative and regulatory changes,
financial market conditions, political and economic uncertainties of foreign
governments, future business decisions, and other uncertainties, all of which
are difficult to predict.

     There are numerous uncertainties inherent in estimating quantities of
proved oil and gas reserves and in projecting future rates of production and the
timing of development expenditures. The total amount or timing of actual future
production may vary significantly from reserves and production estimates. The
drilling of exploratory wells can involve significant risks, including those
related to timing, success rates and cost overruns. Lease and rig availability,
complex geology and other factors can affect these risks. Fluctuations in oil
and gas prices, or a prolonged period of low prices, may substantially adversely
affect the Partnership's financial position, results of operations and cash
flows.

ITEM 7A. MARKET RISK

COMMODITY RISK

     The Partnership's major market risk exposure is in the pricing applicable
to its oil and gas production. Realized pricing is primarily driven by the
prevailing worldwide price for crude oil and spot prices applicable to its
natural gas production. Historically, prices received for oil and gas production
have been volatile and unpredictable and price volatility is expected to
continue. During 2001, monthly oil price realizations ranged from a low of
$18.28 per barrel to a high of $30.45 per barrel. Gas price realizations ranged
from a monthly low of $1.99 per Mcf to a monthly high of $10.13 per Mcf during
the same period. Both oil and gas prices trended downward during most of 2001,
with the Partnership realizing its highest prices of the year in the first
quarter and its lowest prices in the fourth quarter. The Partnership did not use
derivative financial instruments or otherwise engage in hedging activities
during the three-year period ended December 31, 2001.


                                       11
<PAGE>

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

                     APACHE OFFSHORE INVESTMENT PARTNERSHIP

                          INDEX TO FINANCIAL STATEMENTS


<Table>
<Caption>
                                                                                                              PAGE
                                                                                                             NUMBER
                                                                                                             ------
<S>                                                                                                          <C>
Report of Independent Public Accountants.............................................................           13

Statement of Consolidated Income for each of the three years in the period ended December 31, 2001...           14

Statement of Consolidated Cash Flows for each of the three years in the period ended
    December 31, 2001 ...............................................................................           15

Consolidated Balance Sheet as of December 31, 2001 and 2000..........................................           16

Statement of Consolidated Changes in Partners' Capital for each of the three years in the period
    ended December 31, 2001..........................................................................           17

Notes to Consolidated Financial Statements...........................................................           18

Supplemental Oil and Gas Disclosures.................................................................           25

Supplemental Quarterly Financial Data................................................................           27
</Table>

Schedules -

     All financial statement schedules have been omitted because they are either
not required, not applicable or the information required to be presented is
included in the financial statements or related notes thereto.


                                       12
<PAGE>
                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS


To the Partners of Apache Offshore Investment Partnership:

     We have audited the accompanying consolidated balance sheet of Apache
Offshore Investment Partnership (a Delaware general partnership) and subsidiary
as of December 31, 2001 and 2000, and the related consolidated statements of
income, cash flows and changes in partners' capital for each of the three years
in the period ended December 31, 2001. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

     We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

     In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Apache
Offshore Investment Partnership as of December 31, 2001 and 2000, and the
results of its operations and its cash flows for each of the three years in the
period ended December 31, 2001, in conformity with accounting principles
generally accepted in the United States.


                                              ARTHUR ANDERSEN LLP


Houston, Texas
March 1, 2002


                                       13
<PAGE>


                     APACHE OFFSHORE INVESTMENT PARTNERSHIP
                        STATEMENT OF CONSOLIDATED INCOME

<Table>
<Caption>
                                                   FOR THE YEAR ENDED DECEMBER 31,
                                               ---------------------------------------
                                                  2001          2000          1999
                                               -----------   -----------   -----------
<S>                                            <C>           <C>           <C>
REVENUES:
    Oil and gas sales                          $10,346,629   $12,416,857   $ 8,521,418
    Interest income                                 75,126       123,820        92,084
                                               -----------   -----------   -----------

                                                10,421,755    12,540,677     8,613,502
                                               -----------   -----------   -----------

OPERATING EXPENSES:
    Depreciation, depletion and amortization     2,042,461     2,971,525     3,044,474
    Lease operating costs                          635,049       532,433       673,216
    Administrative                                 480,000       540,000       544,760
                                               -----------   -----------   -----------

                                                 3,157,510     4,043,958     4,262,450
                                               -----------   -----------   -----------

NET INCOME                                     $ 7,264,245   $ 8,496,719   $ 4,351,052
                                               ===========   ===========   ===========

NET INCOME ALLOCATED TO:
    Managing Partner                           $ 1,730,985   $ 2,102,310   $ 1,268,895
    Investing Partners                           5,533,260     6,394,409     3,082,157
                                               -----------   -----------   -----------

                                               $ 7,264,245   $ 8,496,719   $ 4,351,052
                                               ===========   ===========   ===========

NET INCOME PER INVESTING PARTNER UNIT          $     4,922   $     5,654   $     2,707
                                               ===========   ===========   ===========

WEIGHTED AVERAGE INVESTING PARTNER
    UNITS OUTSTANDING                              1,124.1       1,130.9       1,138.4
                                               ===========   ===========   ===========
</Table>


               The accompanying notes to financial statements are
                       an integral part of this statement.

                                       14
<PAGE>


                     APACHE OFFSHORE INVESTMENT PARTNERSHIP
                      STATEMENT OF CONSOLIDATED CASH FLOWS


<Table>
<Caption>
                                                                         FOR THE YEAR ENDED DECEMBER 31,
                                                                 --------------------------------------------------
                                                                      2001              2000               1999
                                                                 --------------    --------------    --------------
<S>                                                              <C>               <C>               <C>

CASH FLOWS FROM OPERATING ACTIVITIES:
   Net income                                                    $    7,264,245    $    8,496,719    $    4,351,052
   Adjustments to reconcile net income to net cash
     provided by operating activities:
     Depreciation, depletion and amortization                         2,042,461         2,971,525         3,044,474
     Changes in operating assets and liabilities:
       (Increase) decrease in accrued revenues receivable               731,343          (388,472)          662,173
       Increase (decrease) in accrued operating
         expenses                                                        27,400           (87,287)           73,704
       Increase (decrease) in payable to Apache Corporation             125,507           192,624           128,658
                                                                 --------------    --------------    --------------

     Net cash provided by operating activities                       10,190,956        11,185,109         8,260,061
                                                                 --------------    --------------    --------------

CASH FLOWS FROM INVESTING ACTIVITIES:
   Additions to oil and gas properties                               (3,030,327)       (3,882,050)       (1,376,072)
   Proceeds from sales of oil and gas properties                             --                --           211,426
   Increase (decrease) in accrued development costs                     (96,442)          (85,851)            4,931
                                                                 --------------    --------------    --------------

     Net cash used in investing activities                           (3,126,769)       (3,967,901)       (1,159,715)
                                                                 --------------    --------------    --------------

CASH FLOWS FROM FINANCING ACTIVITIES:
   Repurchase of Partnership Units                                     (195,221)          (34,831)          (69,386)
   Distributions to Investing Partners                               (4,501,620)       (6,500,003)       (3,979,221)
   Distributions to Managing Partner, net                            (1,926,838)       (1,988,308)       (1,627,876)
                                                                 --------------    --------------    --------------

     Net cash used in financing activities                           (6,623,679)       (8,523,142)       (5,676,483)
                                                                 --------------    --------------    --------------

NET INCREASE (DECREASE) IN CASH AND CASH
   EQUIVALENTS                                                          440,508        (1,305,934)        1,423,863

CASH AND CASH EQUIVALENTS, BEGINNING
   OF YEAR                                                            1,442,878         2,748,812         1,324,949
                                                                 --------------    --------------    --------------

CASH AND CASH EQUIVALENTS, END OF YEAR                           $    1,883,386    $    1,442,878    $    2,748,812
                                                                 ==============    ==============    ==============
</Table>


               The accompanying notes to financial statements are
                       an integral part of this statement.

                                       15



<PAGE>


                     APACHE OFFSHORE INVESTMENT PARTNERSHIP
                           CONSOLIDATED BALANCE SHEET


<Table>
<Caption>
                                                                                DECEMBER 31,
                                                                     --------------------------------
                                                                         2001               2000
                                                                     --------------    --------------
<S>                                                                  <C>               <C>

                                     ASSETS

CURRENT ASSETS:
    Cash and cash equivalents                                        $    1,883,386    $    1,442,878
    Accrued revenues receivable                                             292,955         1,024,298
                                                                     --------------    --------------

                                                                          2,176,341         2,467,176
                                                                     --------------    --------------

OIL AND GAS PROPERTIES, on the basis of full cost accounting:
    Proved properties                                                   176,408,723       173,378,396
    Less - Accumulated depreciation, depletion and amortization        (169,172,554)     (167,130,093)
                                                                     --------------    --------------

                                                                          7,236,169         6,248,303
                                                                     --------------    --------------

                                                                     $    9,412,510    $    8,715,479
                                                                     ==============    ==============


                        LIABILITIES AND PARTNERS' CAPITAL

CURRENT LIABILITIES:
    Accrued development costs                                        $      414,558    $      511,000
    Accrued operating expenses                                              112,184            84,784
    Payable to Apache Corporation                                           516,762           391,255
                                                                     --------------    --------------

                                                                          1,043,504           987,039
                                                                     --------------    --------------

COMMITMENTS AND CONTINGENCIES (Note 7)

PARTNERS' CAPITAL:
    Managing Partner                                                        156,228           352,081
    Investing Partners (1,110.3 and 1,128.5 Units
       outstanding, respectively)                                         8,212,778         7,376,359
                                                                     --------------    --------------

                                                                          8,369,006         7,728,440
                                                                     --------------    --------------

                                                                     $    9,412,510    $    8,715,479
                                                                     ==============    ==============
</Table>


               The accompanying notes to financial statements are
                       an integral part of this statement.

                                       16



<PAGE>


                     APACHE OFFSHORE INVESTMENT PARTNERSHIP
             STATEMENT OF CONSOLIDATED CHANGES IN PARTNERS' CAPITAL


<Table>
<Caption>
                                         MANAGING       INVESTING
                                         PARTNER         PARTNERS         TOTAL
                                       ------------    ------------    ------------
<S>                                    <C>             <C>             <C>
BALANCE, DECEMBER 31, 1998             $    597,060    $  8,483,234    $  9,080,294

  Distributions, net                     (1,627,876)     (3,979,221)     (5,607,097)

  Repurchase of Partnership Units                --         (69,386)        (69,386)

  Net income                              1,268,895       3,082,157       4,351,052
                                       ------------    ------------    ------------

BALANCE, DECEMBER 31, 1999                  238,079       7,516,784       7,754,863

  Distributions, net                     (1,988,308)     (6,500,003)     (8,488,311)

  Repurchase of Partnership Units                --         (34,831)        (34,831)

  Net income                              2,102,310       6,394,409       8,496,719
                                       ------------    ------------    ------------

BALANCE, DECEMBER 31, 2000                  352,081       7,376,359       7,728,440

  Distributions, net                     (1,926,838)     (4,501,620)     (6,428,458)

  Repurchase of Partnership Units                --        (195,221)       (195,221)

  Net income                              1,730,985       5,533,260       7,264,245
                                       ------------    ------------    ------------

BALANCE, DECEMBER 31, 2001             $    156,228    $  8,212,778    $  8,369,006
                                       ============    ============    ============
</Table>


               The accompanying notes to financial statements are
                       an integral part of this statement.

                                       17


<PAGE>


                     APACHE OFFSHORE INVESTMENT PARTNERSHIP
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


(1) ORGANIZATION

     NATURE OF OPERATIONS -

         Apache Offshore Investment Partnership was formed as a Delaware general
     partnership on October 31, 1983, consisting of Apache Corporation (Apache)
     as Managing Partner and public investors as Investing Partners. The general
     partnership invested its entire capital in Apache Offshore Petroleum
     Limited Partnership, a Delaware limited partnership formed to conduct oil
     and gas exploration, development and production operations. The
     accompanying financial statements include the accounts of both the limited
     and general partnerships. Apache is the general partner of both the limited
     and general partnerships, and holds slightly less than five percent of the
     1,110.3 Investing Partner Units (Units) outstanding at December 31, 2001.
     The term "Partnership", as used hereafter, refers to the limited or the
     general partnership, as the case may be.

         The Partnership purchased, at cost, an 85 percent interest in offshore
     leasehold interests acquired by Apache as a co-venturer in a series of oil
     and gas exploration, development and production activities on 87 federal
     lease tracts in the Gulf of Mexico, offshore Louisiana and Texas. The
     remaining 15 percent interest was purchased by an affiliated partnership or
     retained by Apache. The Partnership acquired an increased net revenue
     interest in Matagorda Island Blocks 681 and 682 in November 1992, when the
     Partnership and Apache formed a joint venture to acquire a 92.6 percent
     working interest in the blocks.

         Since inception, the Partnership has participated in 14 federal
     offshore lease sales in which 49 prospects were acquired (through the same
     date 42 of those prospects have been surrendered/sold). The Partnership's
     working interests in the seven remaining venture prospects range from 6.29
     percent to 9.44 percent. As of December 31, 2001, the Partnership held a
     remaining interest in 12 tracts acquired through federal lease sales and
     two tracts obtained through farmout arrangements.

         The Partnership's future financial condition and results of operations
     will depend largely upon prices received for its oil and natural gas
     production and the costs of acquiring, finding, developing and producing
     reserves. A substantial portion of the Partnership's production is sold
     under market-sensitive contracts. Prices for oil and natural gas are
     subject to fluctuations in response to changes in supply, market
     uncertainty and a variety of factors beyond the Partnership's control.
     These factors include worldwide political instability (especially in the
     Middle East), the foreign supply of oil and natural gas, the price of
     foreign imports, the level of consumer demand, and the price and
     availability of alternative fuels. With natural gas accounting for 72
     percent of the Partnership's 2001 production and 57 percent of total proved
     reserves, on an energy equivalent basis, the Partnership is affected more
     by fluctuations in natural gas prices than in oil prices.

         Under the terms of the Partnership Agreements, the Investing Partners
     receive 80 percent and Apache receives 20 percent of revenue. Lease
     operating and administrative expenses are allocated to the Investing
     Partners and Apache in the same proportion as revenues. The Investing
     Partners generally pay for 90 percent and Apache generally pays for 10
     percent of exploration and development costs and expenses incurred by the
     Partnership. However, intangible drilling costs, interest costs and fees or
     expenses related to the loans incurred by the Partnership are allocated 99
     percent to the Investing Partners and one percent to Apache until such time
     as the amount so allocated to the Investing Partners equals 90 percent of
     the total amount of such costs, including such costs incurred by Apache
     prior to the formation of the Partnerships.


                                       18
<PAGE>


                     APACHE OFFSHORE INVESTMENT PARTNERSHIP
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

     RIGHT OF PRESENTMENT -

         An amendment to the Partnership Agreements adopted in February 1994,
     created a right of presentment under which all Investing Partners have a
     limited and voluntary right to offer their Units to the Partnership twice
     each year to be purchased for cash. During 2001, the Investing Partners
     sold a total of 18.2 Units to the Partnership for a total of $195,221 in
     cash. The first right of presentment was based upon a valuation date of
     December 31, 2000 for a purchase price of $9,928 per Unit, plus interest to
     the date of payment. The second presentment offer was based on a valuation
     date of June 30, 2001 for a purchase price of $10,460 per Unit, plus
     interest to the payment date. During 2000 and 1999, the Partnership paid
     the Investing Partners $34,831 and $69,386, respectively, to acquire a
     total of 12.5 Units.

         The Partnership is not in a position to predict how many Units will be
     presented for repurchase during 2002, however, no more than 10 percent of
     the outstanding Units may be purchased under the right of presentment in
     any year. The Partnership has no obligation to purchase any Units presented
     to the extent that it determines that it has insufficient funds for such
     purchases.

         The table below sets forth the total repurchase price and the
     repurchase price per Unit for all outstanding Units at each presentment
     period, based on the right of presentment valuation formula defined in the
     amendment to the Partnership Agreement. The right of presentment offers,
     made twice annually, are based on a discounted Unit value formula. The
     discounted Unit value will be not less than the Investing Partner's share
     of: (a) the sum of (i) 70 percent of the discounted estimated future net
     revenues from proved reserves, discounted at a rate of 1.5 percent over
     prime or First National Bank of Chicago's base rate in effect at the time
     the calculation is made, (ii) cash on hand, (iii) prepaid expenses, (iv)
     accounts receivable less a reasonable reserve for doubtful accounts, (v)
     oil and gas properties other than proved reserves at cost less any amounts
     attributable to drilling and completion costs incurred by the Partnership
     and included therein, and (vi) the book value of all other assets of the
     Partnership, less the debts, obligations and other liabilities of all kinds
     (including accrued expenses) then allocable to such interest in the
     Partnership, all determined as of the valuation date, divided by (b) the
     number of Units, and fractions thereof, outstanding as of the valuation
     date. The discounted Unit value does not purport to be, and may be
     substantially different from, the fair market value of a Unit.

<Table>
<Caption>
                 RIGHT OF PRESENTMENT                    TOTAL REPURCHASE                REPURCHASE PRICE
                   VALUATION DATE                              PRICE                          PER UNIT
                 --------------------                    -----------------               ----------------
<S>                                                      <C>                              <C>
                 December 31, 1998                       $     10,451,244                 $        8,410
                 June 30, 1999                                 10,812,281                          6,769
                 December 31, 1999                             12,314,303                          8,874
                 June 30, 2000                                 10,934,084                          6,431
                 December 31, 2000                             13,460,392                          9,928
                 June 30, 2001                                 13,984,141                         10,460
</Table>

     CAPITAL CONTRIBUTIONS -

         A total of $85,000 per Unit, or approximately 57 percent, of investor
     subscription had been called through December 31, 2001. The Partnership
     determined the full purchase price of $150,000 per Unit was not needed, and
     upon completion of the last subscription call in November 1989, released
     the Investing Partners from their remaining liability. As a result of
     investors defaulting on cash calls and repurchases under the presentment
     offer discussed above, the original 1,500 Units have been reduced to
     1,110.3 Units at December 31, 2001.


                                       19
<PAGE>

                     APACHE OFFSHORE INVESTMENT PARTNERSHIP
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)


(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     STATEMENT PRESENTATION -

         The accounts of the Partnerships are maintained on a tax basis method
     of accounting in accordance with the Articles of Partnership and methods of
     reporting allowed for federal income tax purposes.

         The consolidated financial statements included in reports that the
     Partnership files with the Securities and Exchange Commission (SEC) are
     required to be prepared in conformity with generally accepted accounting
     principles. Accordingly, the accompanying consolidated financial statements
     include adjustments to convert from tax basis to the accrual basis method
     in conformity with accounting principles generally accepted in the United
     States.

         The accompanying consolidated financial statements include the accounts
     of Apache Offshore Investment Partnership and Apache Offshore Petroleum
     Limited Partnership after elimination of intercompany balances and
     transactions.

     CASH EQUIVALENTS -

         The Partnership considers all highly liquid debt instruments purchased
     with an original maturity of three months or less to be cash equivalents.
     These investments are carried at cost which approximates market.

     OIL AND GAS PROPERTIES -

         The Partnership uses the full cost method of accounting for financial
     statement purposes. Under this method, the Partnership capitalizes all
     acquisition, exploration and development costs incurred for the purpose of
     finding oil and gas reserves. The amounts capitalized under this method
     include dry hole costs, leasehold costs, engineering, geological,
     exploration, development and other similar costs. Costs associated with
     production and administrative functions are expensed in the period
     incurred. Unless a significant portion of the Partnership's reserve volumes
     are sold (greater than 25 percent), proceeds from the sale of oil and gas
     properties are accounted for as reductions to capitalized costs, and gains
     or losses are not recognized.

         Capitalized costs of oil and gas properties are amortized on the future
     gross revenue method whereby depreciation, depletion and amortization
     (DD&A) expense is computed quarterly by dividing current period oil and gas
     sales by estimated future gross revenue from proved oil and gas reserves
     (including current period oil and gas sales) and applying the resulting
     rate to the net cost of evaluated oil and gas properties, including
     estimated future development costs. The amortizable base includes estimated
     dismantlement, restoration and abandonment costs, net of estimated salvage
     values.

         The Partnership limits the capitalized costs of proved oil and gas
     properties, net of accumulated DD&A, to the estimated future net cash flows
     from proved oil and gas reserves discounted at 10 percent, plus the lower
     of cost or fair value of unproved properties included in the costs being
     amortized, if any. If capitalized costs exceed this limit, the excess is
     charged to DD&A expense. The Partnership has not recorded any write-downs
     of capitalized costs for the three years presented.

         Given the volatility of oil and gas prices, it is reasonably possible
     that the Partnership's estimate of discounted future net cash flows from
     proved oil and gas reserves could change in the near term. If oil and gas
     prices decline significantly, even if only for a short period of time, it
     is possible that write-downs of oil and gas properties could occur in the
     future.

     REVENUE RECOGNITION -

         The Partnership uses the sales method of accounting for natural gas
     revenues. Under this method, revenues are recognized based on actual
     volumes of gas sold to purchasers. The volumes of gas sold may differ from
     the volumes to which the Partnership is entitled based on its interests in
     the properties. These differences create


                                       20
<PAGE>

                     APACHE OFFSHORE INVESTMENT PARTNERSHIP
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)


     imbalances that are recognized as a liability only when the estimated
     remaining reserves will not be sufficient to enable the underproduced owner
     to recoup its entitled share through production. As of December 31, 2001
     and 2000, the Partnership did not have any liabilities for gas imbalances
     in excess of remaining reserves. No receivables are recorded for those
     wells where the Partnership has taken less than its share of production.
     Gas imbalances are reflected as adjustments to proved gas revenues and
     future cash flows in the unaudited supplemental oil and gas disclosures.
     Adjustments for gas imbalances totaled less than one percent of the
     Partnership's proved gas reserves at December 31, 2001, 2000 and 1999.

     NET INCOME PER INVESTING UNIT -

         The net income per Investing Partner Unit is calculated by dividing the
     aggregate Investing Partners' net income for the period by the number of
     weighted average Investing Partner Units outstanding for that period.

     INCOME TAXES -

         The profit or loss of the Partnership for federal income tax reporting
     purposes is included in the income tax returns of the partners.
     Accordingly, no recognition has been given to income taxes in the
     accompanying financial statements.

     USE OF ESTIMATES -

         The preparation of financial statements in conformity with generally
     accepted accounting principles requires management to make estimates and
     assumptions that affect the reported amounts of assets and liabilities and
     disclosure of contingent assets and liabilities at the date of the
     financial statements and the reported amounts of revenues and expenses
     during the reporting period. Actual results could differ from those
     estimates. Significant estimates with regard to these financial statements
     include the estimate of proved oil and gas reserve quantities and the
     related present value of estimated future net cash flows therefrom. See
     unaudited "Supplemental Oil and Gas Disclosures" below.

     PAYABLE TO APACHE -

         The payable to Apache represents the net result of the Investing
     Partners' revenue and expenditure transactions in the current month.
     Generally, this amount will be transferred to Apache in the month after the
     Partnership's transactions are processed and the net results from
     operations are determined.

     MAINTENANCE AND REPAIRS -

         Maintenance and repairs are charged to expense as incurred.
     Recompletions and replacements that improve or extend the life of existing
     properties are capitalized.


                                       21
<PAGE>

                     APACHE OFFSHORE INVESTMENT PARTNERSHIP
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)


(3) COMPENSATION TO APACHE

         Apache is entitled to the following types of compensation and
     reimbursement for costs and expenses.

<Table>
<Caption>
                                                                               TOTAL REIMBURSED BY THE INVESTING
                                                                            PARTNERS FOR THE YEAR ENDED DECEMBER 31,
                                                                           -------------------------------------------
                                                                              2001            2000           1999
                                                                           -----------     -----------    ------------
                                                                                         (In thousands)
<S>                                                                        <C>             <C>            <C>

        a. Apache is reimbursed for general, administrative and
           overhead expenses incurred in connection with the
           management and operation of the Partnership's business          $      384      $      432     $      436
                                                                           ===========     ===========    ============

        b. 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                                          $      147      $      190     $       73
                                                                           ===========     ===========    ============
</Table>

         Apache operates certain Partnership properties. Billings to the
     Partnership are made on the same basis as to unaffiliated third parties or
     at prevailing industry rates.

(4) OIL AND GAS PROPERTIES

         The following tables contain direct cost information and changes in the
     Partnership's oil and gas properties for each of the years ended December
     31. All costs of oil and gas properties are currently being amortized.

<Table>
<Caption>
                                                2001         2000         1999
                                             ----------   ----------   ----------
                                                        (In thousands)
<S>                                          <C>          <C>          <C>

        Oil and Gas Properties

        Balance, beginning of year           $  173,378   $  169,496   $  168,332
        Costs incurred during the year:
          Development -
             Investing Partners                   2,962        3,696        1,367
             Managing Partner                        69          186            9
          Property sales proceeds (1) -
             Investing Partners                      --           --         (191)
             Managing Partner                        --           --          (21)
                                             ----------   ----------   ----------

        Balance, end of year                 $  176,409   $  173,378   $  169,496
                                             ==========   ==========   ==========
</Table>

(1)  The 1999 property sale proceeds reflect the sale of the Partnership's
     interest in Matagorda Island Block 705 (Roberto Prospect) and the southwest
     quadrant of North Padre Island Block 976 (Rosita Prospect).


                                       22
<PAGE>

                     APACHE OFFSHORE INVESTMENT PARTNERSHIP
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)


<Table>
<Caption>
                                                                    MANAGING    INVESTING
                                                                    PARTNER      PARTNERS      TOTAL
                                                                   ----------   ----------   ----------
                                                                              (In thousands)
<S>                                                                <C>          <C>          <C>
        Accumulated Depreciation, Depletion and Amortization

        Balance, December 31, 1998                                 $   20,101   $  141,013   $  161,114
          Provision                                                       197        2,847        3,044
                                                                   ----------   ----------   ----------

        Balance, December 31, 1999                                     20,298      143,860      164,158
          Provision                                                       167        2,805        2,972
                                                                   ----------   ----------   ----------

        Balance, December 31, 2000                                     20,465      146,665      167,130
          Provision                                                       116        1,927        2,043
                                                                   ----------   ----------   ----------

        Balance, December 31, 2001                                 $   20,581   $  148,592   $  169,173
                                                                   ==========   ==========   ==========
</Table>

         The Partnership's aggregate DD&A expense as a percentage of oil and gas
     sales for 2001, 2000 and 1999 was 20 percent, 24 percent and 36 percent,
     respectively.

(5) MAJOR CUSTOMER AND RELATED PARTIES INFORMATION

         Revenues received from major third party customers that exceeded 10
     percent of oil and gas sales are discussed below. No other third party
     customers individually accounted for more than ten percent of oil and gas
     sales.

         Sales to Cinergy Marketing & Trading, LLC accounted for 73 percent, 71
     percent, and 74 percent of the Partnership's oil and gas sales in 2001,
     2000 and 1999, respectively. In 1998, Apache formed a strategic alliance
     with Cinergy Corp. (Cinergy) to market substantially all of Apache's
     natural gas production from North America and sold its 57 percent interest
     in Producers Energy Marketing LLC (ProEnergy) to Cinergy. In July 1998, in
     connection with the sale of its interest, Apache entered into a gas
     purchase agreement with Cinergy to market most of Apache's North American
     natural gas production for 10 years, with an option, after prior notice, to
     terminate after six years. Apache also sells most of the Partnership's
     natural gas production to Cinergy under the gas purchase agreement. The
     prices the Partnership receives for its gas production, in the opinion of
     Apache, approximate market prices.

         Apache Crude Oil Marketing, Inc., a wholly-owned subsidiary of Apache,
     purchased oil and condensate from the Partnership which accounted for
     approximately 26 percent and 12 percent of the Partnership's total oil and
     gas sales in 2001 and 2000, respectively. The prices the Partnership
     received for these sales were based on third-party pricing indexes, and in
     the opinion of Apache, comparable to prices that would have been received
     from a non-affiliated party.

          Sales of oil and condensate to Williams Energy Marketing & Trading
     Company accounted for 10 percent of the Partnership's oil and gas sales in
     2000. Sales to Plains Petroleum Operating Co. accounted for 26 percent of
     the Partnership's oil and gas sales in 1999.

         Effective November 1992, with Apache's and the Partnership's
     acquisition of an additional net revenue interest in Matagorda Island
     Blocks 681 and 682, a wholly-owned subsidiary of Apache purchased from
     Shell Oil Company (Shell) a 14.4 mile natural gas and condensate pipeline
     connecting Matagorda Island Block 681 to onshore markets. The Partnership
     paid the Apache subsidiary transportation fees totaling $45,147 in 2001,
     $60,690 in 2000 and $99,319 in 1999 for the Partnership's share of gas. The
     fees were at the same rates and terms as previously paid to Shell.

         The Partnership's revenues are derived principally from
     uncollateralized sales to customers in the oil and gas industry; therefore,
     customers may be similarly affected by changes in economic and other
     conditions within the industry. The Partnership has not experienced
     material credit losses on such sales.


                                       23
<PAGE>

                     APACHE OFFSHORE INVESTMENT PARTNERSHIP
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)


(6) FINANCIAL INSTRUMENTS

         The carrying amount of cash and cash equivalents, accrued revenues
     receivables and accrued costs included in the accompanying balance sheet
     approximated their fair values at December 31, 2001 and 2000 due to their
     short maturities. The Partnership did not use derivative financial
     instruments or otherwise engage in hedging activities during the three-year
     period ended December 31, 2001.

(7) COMMITMENTS AND CONTINGENCIES

         Litigation - The Partnership is involved in litigation and is subject
     to governmental and regulatory controls arising in the ordinary course of
     business. It is the opinion of the Apache's management that all claims and
     litigation involving the Partnership are not likely to have a material
     adverse effect on its financial position or results of operations.

         Environmental - The Partnership, as an owner or lessee of interests in
     oil and gas properties, is subject to various federal, state, local and
     foreign country laws and regulations relating to discharge of materials
     into, and protection of, the environment. These laws and regulations may,
     among other things, impose liability on the lessee under an oil and gas
     lease for the cost of pollution clean-up resulting from operations and
     subject the lessee to liability for pollution damages. Apache maintains
     insurance coverage on the Partnership's properties, which it believes, is
     customary in the industry, although it is not fully insured against all
     environmental risks.

(8) NEW ACCOUNTING PRONOUNCEMENTS

         In June 2001, the Financial Accounting Standards Board issued Statement
     of Financial Accounting Standards (SFAS) No. 143 "Accounting for Asset
     Retirement Obligations." SFAS No. 143 addresses financial accounting and
     reporting for obligations associated with the retirement of tangible
     long-lived assets and the associated asset retirement costs. This statement
     requires companies to record the fair value of legal obligations associated
     with the retirement of tangible long-lived assets in the period in which it
     is incurred. The liability is capitalized as part of the related long-lived
     asset's carrying amount. Over time, accretion of the liability is
     recognized as an operating expense and the capitalized cost is depreciated
     over the expected useful life of the related asset. SFAS No. 143 is
     effective for fiscal years beginning after June 15, 2002, with earlier
     adoption encouraged. The Partnership's asset retirement obligations relate
     primarily to the dismantlement of offshore platforms. The Partnership
     expects to adopt this new standard effective January 1, 2003. The
     Partnership is currently evaluating the impact of adopting this new
     standard and accordingly has not quantified the impact on the consolidated
     financial statements.


                                       24
<PAGE>

                     APACHE OFFSHORE INVESTMENT PARTNERSHIP
                      SUPPLEMENTAL OIL AND GAS DISCLOSURES
                                   (UNAUDITED)


     OIL AND GAS RESERVE INFORMATION -

         Proved oil and gas reserve quantities are based on estimates prepared
     by Ryder Scott Company, L.P., Petroleum Consultants, independent petroleum
     engineers, in accordance with guidelines established by the SEC. These
     reserves are subject to revision due to the inherent imprecision in
     estimating reserves, and are revised as additional information becomes
     available. All the Partnership's reserves are located offshore Texas and
     Louisiana.

         There are numerous uncertainties inherent in estimating quantities of
     proved reserves and projecting future rates of production and timing of
     development expenditures. The following reserve data represents estimates
     only and should not be construed as being exact.

     (Oil in Mbbls and gas in MMcf)

<Table>
<Caption>
                                                         2001                   2000                    1999
                                                 --------------------    --------------------    --------------------
                                                   OIL         GAS         OIL         GAS         OIL         GAS
                                                 --------    --------    --------    --------    --------    --------
<S>                                              <C>         <C>         <C>         <C>         <C>         <C>

      Proved Reserves

        Beginning of year                             883       8,080         687       8,992         832      10,269
          Extensions, discoveries and other
            additions                                 155         697         239         747           4         163
          Revisions of previous estimates             (41)          3          76         661         (27)      1,684
          Production                                 (112)     (1,705)       (119)     (2,320)       (122)     (2,938)
          Sales of reserves in-place                   --          --          --          --          --        (186)
                                                 --------    --------    --------    --------    --------    --------
        End of year                                   885       7,075         883       8,080         687       8,992
                                                 ========    ========    ========    ========    ========    ========
      Proved Developed

        Beginning of year                             736       7,462         613       8,679         792       8,585
                                                 ========    ========    ========    ========    ========    ========
        End of year                                   767       6,685         736       7,462         613       8,679
                                                 ========    ========    ========    ========    ========    ========
</Table>


                                       25
<PAGE>


                     APACHE OFFSHORE INVESTMENT PARTNERSHIP
               SUPPLEMENTAL OIL AND GAS DISCLOSURES - (CONTINUED)
                                   (UNAUDITED)


     FUTURE NET CASH FLOWS -

         The following table sets forth unaudited information concerning future
     net cash flows from proved oil and gas reserves. Future cash inflows are
     based on year-end prices. Operating costs and future development costs are
     based on current costs with no escalation. As the Partnership pays no
     income taxes, estimated future income tax expenses are omitted. This
     information does not purport to present the fair value of the Partnership's
     oil and gas assets, but does present a standardized disclosure concerning
     possible future net cash flows that would result under the assumptions
     used.

     Discounted Future Net Cash Flows Relating to Proved Reserves

<Table>
<Caption>
                                                    DECEMBER 31,
                                       --------------------------------------
                                          2001          2000          1999
                                       ----------    ----------    ----------
                                                  (In thousands)
<S>                                    <C>           <C>           <C>

Future cash inflows                    $   36,604    $  104,319    $   37,964
Future production costs                    (4,440)       (3,705)       (3,679)
Future development costs                   (4,937)       (5,958)       (3,540)
                                       ----------    ----------    ----------
Net cash flows                             27,227        94,656        30,745
10 percent annual discount rate            (9,794)      (29,333)       (9,483)
                                       ----------    ----------    ----------
Discounted future net cash flows       $   17,433    $   65,323    $   21,262
                                       ==========    ==========    ==========
</Table>

          The following table sets forth the principal sources of change in the
     discounted future net cash flows:

<Table>
<Caption>
                                                            FOR THE YEAR ENDED DECEMBER 31,
                                                         --------------------------------------
                                                            2001          2000          1999
                                                         ----------    ----------    ----------
                                                                    (In thousands)

<S>                                                      <C>           <C>           <C>
        Sales, net of production costs                   $   (9,712)   $  (11,884)   $   (7,848)
        Net change in prices and production costs           (43,479)       39,718        10,868
        Extensions, discoveries and other additions           2,730         7,644           483
        Development costs incurred                            1,863           933           885
        Revisions of quantities                                (428)        6,016         2,919
        Accretion of discount                                 6,532         2,126         1,373
        Changes in future development costs                     174        (1,799)           24
        Sales of reserves in-place                               --            --          (214)
        Changes in production rates and other                (5,570)        1,307          (956)
                                                         ----------    ----------    ----------
                                                         $  (47,890)   $   44,061    $    7,534
                                                         ==========    ==========    ==========
</Table>


                                       26
<PAGE>

                     APACHE OFFSHORE INVESTMENT PARTNERSHIP
                      SUPPLEMENTAL QUARTERLY FINANCIAL DATA
                                   (UNAUDITED)

<Table>
<Caption>
                                            FIRST      SECOND      THIRD     FOURTH      TOTAL
                                           --------   --------   --------   --------   --------
                                                  (In thousands, except per Unit amounts)
<S>                                        <C>        <C>        <C>        <C>        <C>

         2001
            Revenues                       $  4,010   $  2,788   $  2,068   $  1,556   $ 10,422
            Expenses                          1,013        767        717        661      3,158
                                           --------   --------   --------   --------   --------
            Net income                     $  2,997   $  2,021   $  1,351   $    895   $  7,264
                                           ========   ========   ========   ========   ========

            Net income allocated to:
               Managing Partner            $    699   $    470   $    333   $    229   $  1,731
               Investing Partner              2,298      1,551      1,018        666      5,533
                                           --------   --------   --------   --------   --------
                                           $  2,997   $  2,021   $  1,351   $    895   $  7,264
                                           ========   ========   ========   ========   ========

            Net income per Investing
              Partner Unit                 $  2,036   $  1,377   $    907   $    602   $  4,922
                                           ========   ========   ========   ========   ========


         2000
            Revenues                       $  2,572   $  3,037   $  3,358   $  3,574   $ 12,541
            Expenses                            938      1,014      1,051      1,041      4,044
                                           --------   --------   --------   --------   --------
            Net income                     $  1,634   $  2,023   $  2,307   $  2,533   $  8,497
                                           ========   ========   ========   ========   ========

            Net income allocated to:
               Managing Partner            $    420   $    506   $    571   $    605   $  2,102
               Investing Partner              1,214      1,517      1,736      1,928      6,395
                                           --------   --------   --------   --------   --------
                                           $  1,634   $  2,023   $  2,307   $  2,533   $  8,497
                                           ========   ========   ========   ========   ========

            Net income per Investing
              Partner Unit                 $  1,072   $  1,340   $  1,537   $  1,705   $  5,654
                                           ========   ========   ========   ========   ========
</Table>


                                       27
<PAGE>


ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
        FINANCIAL DISCLOSURE

     None.

                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE PARTNERSHIP

     All management functions are performed by Apache, the Managing Partner of
the Partnership. The Partnership itself has no officers or directors.
Information concerning the officers and directors of Apache set forth under the
captions "Nominees for Election as Directors", "Continuing Directors",
"Executive Officers of the Company", and "Securities Ownership and Principal
Holders" in the proxy statement relating to the 2002 annual meeting of
shareholders of Apache (the Apache Proxy) is incorporated herein by reference.

ITEM 11. EXECUTIVE COMPENSATION

     See Note (3), "Compensation to Apache" of the Partnership's financial
statements, under Item 8 above, for information regarding compensation to Apache
as Managing Partner. The information concerning the compensation paid by Apache
to its officers and directors set forth under the captions "Summary Compensation
Table", "Option/SAR Grants Table", "Option/SAR Exercises and Year-End Value
Table", "Employment Contracts and Termination of Employment and
Change-in-Control Arrangements", and "Director Compensation" in the Apache Proxy
is incorporated herein by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     Apache, as an Investing Partner and the General Partner, owns 53 Units, or
4.8 percent of the outstanding Units of the Partnership, as of December 31,
2001. Directors and officers of Apache own four Units, less than one percent of
the Partnership's Units, as of December 31, 2001. Apache owns a one-percent
General Partner interest (15 equivalent Units). To the knowledge of the
Partnership, no Investing Partner owns, of record or beneficially, more than
five percent of the Partnership's outstanding Units.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     See Note (3), "Compensation to Apache" of the Partnership's financial
statements, under Item 8 above, for information regarding compensation to Apache
as Managing Partner. See Note (5), "Major Customers and Related Parties
Information" of the Partnership's financial statements for amounts paid to
subsidiaries of Apache, and for other related party information.


                                       28
<PAGE>


                                     PART IV

ITEM 14. 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

<Table>
<S>              <C>
           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.

          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 29, 2002,
                 relating to the 2002 annual meeting of shareholders of Apache
                 Corporation (incorporated by reference to the document filed by
                 Apache pursuant to Rule 14A, Commission File No. 1-4300).

         *99.3   Notification letter to the Commission from Apache Corporation,
                 dated  March 21, 2002, pursuant to Temporary Note 3T to
                 Regulation S-X.
</Table>

                 *Filed herewith.

  b. Reports filed on Form 8-K.

     No reports on Form 8-K were filed during the fiscal quarter ended December
31, 2001.


                                       29
<PAGE>

                                   SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

                                       APACHE OFFSHORE INVESTMENT PARTNERSHIP

                                       By:  Apache Corporation, General Partner


Date:   March 21, 2002                 By: /s/ Raymond Plank
                                           ------------------------------------
                                           Raymond Plank,
                                           Chairman and Chief Executive Officer

                                POWER OF ATTORNEY

     The officers and directors of Apache Corporation, General Partner of Apache
Offshore Investment Partnership, whose signatures appear below, hereby
constitute and appoint Raymond Plank, G. Steven Farris, Z.S. Kobiashvili and
Roger B. Plank, and each of them (with full power to each of them to act alone),
the true and lawful attorney-in-fact to sign and execute, on behalf of the
undersigned, any amendment(s) to this report and each of the undersigned does
hereby ratify and confirm all that said attorneys shall do or cause to be done
by virtue thereof.

     Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.

<Table>
<Caption>
                    NAME                                              TITLE                               DATE
--------------------------------------------          ----------------------------------------       ----------------
<S>                                                   <C>                                            <C>
/s/ Raymond Plank                                     Chairman and Chief Executive                   March 21, 2002
--------------------------------------------            Officer (Principal Executive Officer)
Raymond Plank

/s/ Roger B. Plank                                    Executive Vice President and Chief             March 21, 2002
--------------------------------------------            Financial Officer (Principal Financial
Roger B. Plank                                          Officer)

/s/ Thomas L. Mitchell                                Vice President and Controller                  March 21, 2002
--------------------------------------------            (Principal Accounting Officer)
Thomas L. Mitchell

</Table>





<PAGE>



<Table>
<Caption>
                    NAME                                              TITLE                               DATE
--------------------------------------------          ----------------------------------------        --------------
<S>                                                   <C>                                             <C>

/s/ Frederick M. Bohen                                 Director                                       March 21, 2002
--------------------------------------------
Frederick M. Bohen

/s/ G. Steven Farris                                   Director                                       March 21, 2002
--------------------------------------------
G. Steven Farris

/s/ Randolph M. Ferlic                                 Director                                       March 21, 2002
--------------------------------------------
Randolph M. Ferlic

/s/ Eugene C. Fiedorek                                 Director                                       March 21, 2002
--------------------------------------------
Eugene C. Fiedorek

/s/ A. D. Frazier, Jr.                                 Director                                       March 21, 2002
--------------------------------------------
A. D. Frazier, Jr.

/s/ John A. Kocur                                      Director                                       March 21, 2002
--------------------------------------------
John A. Kocur

/s/ George D. Lawrence Jr.                             Director                                       March 21, 2002
--------------------------------------------
George D. Lawrence Jr.

/s/ Mary Ralph Lowe                                    Director                                       March 21, 2002
--------------------------------------------
Mary Ralph Lowe

/s/ F. H. Merelli                                      Director                                       March 21, 2002
--------------------------------------------
F. H. Merelli

/s/ Rodman D. Patton                                   Director                                       March 21, 2002
--------------------------------------------
Rodman D. Patton

/s/ Charles J. Pitman                                  Director                                       March 21, 2002
--------------------------------------------
Charles J. Pitman
</Table>



<PAGE>


                                INDEX TO EXHIBITS

<Table>
<Caption>
         EXHIBIT
         NUMBER                      DESCRIPTION
         -------                     -----------
<S>              <C>

           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.

          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 29, 2002,
                 relating to the 2002 annual meeting of shareholders of Apache
                 Corporation (incorporated by reference to the document filed by
                 Apache pursuant to Rule 14A, Commission File No. 1-4300).

         *99.3   Notification letter to the Commission from Apache Corporation,
                 dated March 21, 2002, pursuant to Temporary Note 3T to
                 Regulation S-4.
</Table>

                 *Filed herewith.