UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended September 30, 2005 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 (Exact Name of Registrant as Specified in Its Charter) Delaware 41-1464066 (State or Other Jurisdiction of (I.R.S. Employer Incorporation or Organization) Identification Number) Suite 100, One Post Oak Central 77056-4400 2000 Post Oak Boulevard, Houston, TX (Zip Code) (Address of Principal Executive Offices) Registrant's Telephone Number, Including Area Code: (713) 296-6000 Indicate by check mark whether the registrant (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 registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES X NO ----- -----
PART I - FINANCIAL INFORMATION ITEM 1 - FINANCIAL STATEMENTS APACHE OFFSHORE INVESTMENT PARTNERSHIP STATEMENT OF INCOME (UNAUDITED) FOR THE QUARTER FOR THE NINE MONTHS ENDED SEPTEMBER 30, ENDED SEPTEMBER 30, ----------------------- ----------------------- 2005 2004 2005 2004 ---------- ---------- ---------- ---------- REVENUES: Oil and gas sales $3,113,863 $3,440,706 $9,839,038 $9,865,405 Interest income 40,043 13,757 79,678 26,006 ---------- ---------- ---------- ---------- 3,153,906 3,454,463 9,918,716 9,891,411 ---------- ---------- ---------- ---------- EXPENSES: Depreciation, depletion and amortization 448,058 766,845 1,463,283 2,140,142 Asset retirement obligation accretion 10,480 12,272 35,038 36,290 Lease operating costs 344,508 183,885 942,608 609,656 Gathering and transportation expense 34,155 33,376 118,530 95,496 Administrative 107,000 102,000 321,000 306,000 ---------- ---------- ---------- ---------- 944,201 1,098,378 2,880,459 3,187,584 ---------- ---------- ---------- ---------- NET INCOME $2,209,705 $2,356,085 $7,038,257 $6,703,827 ========== ========== ========== ========== NET INCOME ALLOCATED TO: Managing Partner $ 514,513 $ 603,772 $1,653,873 $1,712,934 Investing Partners 1,695,192 1,752,313 5,384,384 4,990,893 ---------- ---------- ---------- ---------- $2,209,705 $2,356,085 $7,038,257 $6,703,827 ========== ========== ========== ========== NET INCOME PER INVESTING PARTNER UNIT $ 1,606 $ 1,657 $ 5,101 $ 4,712 ========== ========== ========== ========== WEIGHTED AVERAGE INVESTING PARTNER UNITS OUTSTANDING 1,055.4 1,057.2 1,055.5 1,059.2 ========== ========== ========== ========== The accompanying notes to financial statements are an integral part of this statement. 1
APACHE OFFSHORE INVESTMENT PARTNERSHIP STATEMENT OF CASH FLOWS (UNAUDITED) FOR THE NINE MONTHS ENDED SEPTEMBER 30, ----------- ----------- 2005 2004 ----------- ----------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 7,038,257 $ 6,703,827 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation, depletion and amortization 1,463,283 2,140,142 Asset retirement obligation accretion 35,038 36,290 Dismantlement and abandonment cost -- (187,160) Changes in operating assets and liabilities: (Increase) decrease in accrued revenues receivable (55,531) 31,144 Increase (decrease) in accrued operating expenses 14,825 3,932 (Increase) decrease in payable to/receivable from Apache Corporation 393,918 (82,198) ----------- ----------- Net cash provided by operating activities 8,889,790 8,645,977 ----------- ----------- CASH FLOWS FROM INVESTING ACTIVITIES: Additions to oil and gas properties (492,363) (1,706,329) Proceeds from sale of oil and gas properties 136,252 -- ----------- ----------- Net cash used in investing activities (356,111) (1,706,329) ----------- ----------- CASH FLOWS FROM FINANCING ACTIVITIES: Repurchase of Partnership Units (3,193) (41,321) Distributions to Investing Partners (4,222,585) (2,121,466) Distributions to Managing Partner (1,701,939) (1,745,962) ----------- ----------- Net cash used in financing activities (5,927,717) (3,908,749) ----------- ----------- NET INCREASE IN CASH AND CASH EQUIVALENTS 2,605,962 3,030,899 CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 3,333,640 2,271,495 ----------- ----------- CASH AND CASH EQUIVALENTS, END OF PERIOD $ 5,939,602 $ 5,302,394 =========== =========== The accompanying notes to financial statements are an integral part of this statement. 2
APACHE OFFSHORE INVESTMENT PARTNERSHIP BALANCE SHEET (UNAUDITED) SEPTEMBER 30, DECEMBER 31, 2005 2004 ------------- ------------- ASSETS CURRENT ASSETS: Cash and cash equivalents $ 5,939,602 $ 3,333,640 Accrued revenues receivable 1,020,852 965,321 Receivable from Apache Corporation -- 165,474 ------------- ------------- 6,960,454 4,464,435 ------------- ------------- OIL AND GAS PROPERTIES, on the basis of full cost accounting: Proved properties 184,616,609 184,065,602 Less - Accumulated depreciation, depletion and amortization (177,778,500) (176,315,217) ------------- ------------- 6,838,109 7,750,385 ------------- ------------- $ 13,798,563 $ 12,214,820 ============= ============= LIABILITIES AND PARTNERS' CAPITAL CURRENT LIABILITIES: Distributions payable $ 5,277,032 $ -- Accrued exploration and development 363,229 -- Accrued operating expenses 78,594 63,769 Payable to Apache Corporation 228,444 -- ------------- ------------- 5,947,299 63,769 ------------- ------------- ASSET RETIREMENT OBLIGATION 724,912 858,207 ------------- ------------- PARTNERS' CAPITAL: Managing Partner 159,555 207,621 Investing Partners (1,055.4 and 1,055.7 units outstanding, respectively) 6,966,797 11,085,223 ------------- ------------- 7,126,352 11,292,844 ------------- ------------- $ 13,798,563 $ 12,214,820 ============= ============= The accompanying notes to financial statements are an integral part of this statement. 3
APACHE OFFSHORE INVESTMENT PARTNERSHIP NOTES TO FINANCIAL STATEMENTS (UNAUDITED) The financial statements included herein have been prepared by the Apache Offshore Investment Partnership (the Partnership), without audit, pursuant to the rules and regulations of the Securities and Exchange Commission, and reflect all adjustments which are, in the opinion of management, necessary for a fair statement of the results for the interim periods, on a basis consistent with the annual audited financial statements. All such adjustments are of a normal, recurring nature. Certain information, accounting policies, and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been omitted pursuant to such rules and regulations, although the Partnership believes that the disclosures are adequate to make the information presented not misleading. These financial statements should be read in conjunction with the financial statements and the summary of significant accounting policies and notes thereto included in the Partnership's latest annual report on Form 10-K. 1. RECEIVABLE FROM/PAYABLE TO APACHE CORPORATION The receivable from/payable to Apache Corporation, the Partnership's managing partner (Apache or the Managing Partner), represents the net result of the Investing Partners' revenue and expenditure transactions in the current month. Generally, cash in this amount will be paid by Apache to the Partnership or transferred to Apache in the month after the Partnership's transactions are processed and the net results of operations are determined. 2. RIGHT OF PRESENTMENT As provided in the Partnership Agreement, as amended (the Amended Partnership Agreement), a first right of presentment offer for 2005 of $12,418 per Unit, plus interest to the date of payment, was made to Investing Partners in April 2005, based on a valuation date of December 31, 2004. As a result, the Partnership purchased .25 Units in May 2005 for a total of $3,193. A second right of presentment offer for 2005 of $9,337 per Unit, plus interest to the date of payment, was made to Investing Partners on October 28, 2005, based on a valuation date of June 30, 2005. The Investing Partners have until the close of business on November 28, 2005 to present their Units for repurchase by the Partnership. The Partnership will determine by December 15, 2005, whether or not to accept each Unit offered during this election period. The Partnership is not in a position to predict how many Units will be presented for repurchase during the fourth quarter of 2005 and cannot, at this time, determine if the Partnership will have sufficient funds available to repurchase any Units. The Partnership has no obligation to purchase any Units presented to the extent it determines that it has insufficient funds for such purchases. The Amended Partnership Agreement contains limitations on the number of Units that the Partnership can repurchase, including a limit of 10 percent of the outstanding Units on an annual basis. 3. ASSET RETIREMENT OBLIGATIONS The following table describes changes to the Partnership's asset retirement obligation liability for the nine months ended September 30, 2005: Balance at December 31, 2004 $ 858,207 Accretion expense 35,038 Reduction in liability from sale of properties (168,333) --------- Balance at September 30, 2005 $ 724,912 ========= 4
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS NET INCOME AND REVENUE The Partnership earned $2.2 million during the third quarter of 2005, six percent less than the net income reported in the third quarter of 2004. Net income per Investing Partner Unit decreased from $1,657 in the third quarter of 2004 to $1,606 in the current quarter. Lower oil and gas production and higher operating costs more than offset the impact of higher prices in the current period. Downtime for hurricanes which battered the U.S. Gulf Coast during the quarter contributed to a 40 percent decline in equivalent production from a year ago. By the end of the first week in October, the Partnership had restored substantially all of its production impacted by hurricanes. While operators continue to inspect platforms and equipment, the Partnership appears to have avoided major damage to its facilities. Net income for the first nine months of 2005, totaled $7.0 million or $5,101 per Investing Partner Unit. Net income for the same period in 2004 totaled $6.7 million or $4,712 per Investing Partner Unit. Higher oil and gas prices during the first nine months of 2005 drove the five percent increase in net income from the comparable period in 2004. Total revenues for the third quarter decreased $.3 million, or nine percent, from a year ago as a result of lower production. For the nine months ending September 30, 2005, total revenue was essentially even with a year ago. Interest income for the third quarter and first nine months of 2005 were approximately three times the amounts in 2004 on higher average cash balances and higher interest rates. The Partnership's oil and gas production volume and price information is summarized in the following table (gas volumes presented in thousand cubic feet (Mcf) per day): FOR THE QUARTER ENDED SEPTEMBER 30, FOR THE NINE MONTHS ENDED SEPTEMBER 30, ----------------------------------- --------------------------------------- INCREASE INCREASE 2005 2004 (DECREASE) 2005 2004 (DECREASE) ------ ------ ---------- ------ ------ ---------- Gas volume - Mcf per day 2,608 3,891 (33%) 3,146 3,761 (16%) Average gas price - per Mcf $ 8.94 $ 5.85 53% $ 7.39 $ 5.93 25% Oil volume - barrels per day 161 286 (44%) 211 312 (32%) Average oil price - per barrel $60.68 $42.83 42% $52.36 $38.45 36% NGL volume - barrels per day 25 93 (73%) 54 69 (22%) Average NGL price - per barrel $31.17 $25.71 21% $32.33 $24.77 31% OIL AND GAS SALES Natural gas production revenues for the third quarter of 2005 totaled $2.1 million, up two percent from the third quarter of 2004 as higher prices more than offset the impact of lower production. The Partnership's average realized natural gas price for the third quarter of 2005 increased 53 percent compared to the year-earlier period. The $3.09 per Mcf increase in gas price from a year ago positively impacted sales by approximately $1.1 million. Natural gas volumes on a daily basis decreased 33 percent from a year ago as a result of hurricane-related downtime and natural depletion. The Partnership experienced up to 22 days of hurricane-related downtime during the third quarter, primarily for Hurricane Katrina in August and Hurricane Rita in September. By the end of the first week in October, the Partnership had restored substantially all of its production impacted by hurricanes. The Partnership successfully completed the Ship Shoal 258 JA-9 well as a producer in late August, but the well had minimal impact on the quarter with the downtime for hurricanes. The Partnership's crude oil production revenues for the third quarter of 2005 totaled $.9 million, a 20 percent decrease from the third quarter of 2004. Oil production for the quarter declined 44 percent from the comparable period in 2004 as a result of natural depletion and hurricane-related downtime. A $17.85 per barrel, or 42 percent, increase in the Partnership's average realized oil price favorably impacted oil revenues by $.5 million. Gas sales for the first nine months of 2005 of $6.3 million increased four percent, when compared to the same period in 2004. The Partnership's average realized gas prices increased $1.46 per Mcf, when compared with the first 5
nine months of 2004. Daily gas production for the first nine months of 2005 decreased 16 percent when compared to the same period in 2004. Declines at South Timbalier 295 and Matagorda 681/682 more than offset production added through drilling at Ship Shoal 258/259 in 2004 and 2005. For the nine months ended September 30, 2005, oil sales decreased eight percent from a year ago to $3.0 million. The Partnership's oil sales revenues were favorably impacted by an 36 percent increase in the average realized oil price. Daily oil production declined 32 percent from a year ago as a result of natural depletion and downtime for weather. The Partnership sold an average of 54 barrels per day of natural gas liquids from processing gas during the first nine months of 2005, a 22 percent decrease over the comparable period in 2004. Declines in oil and gas production can be expected in future periods due to natural depletion. Given the small number of producing wells owned by the Partnership, and their natural depletion, the Partnership's future production will be subject to more volatility than those companies with greater reserves and longer-lived properties. OPERATING EXPENSES The Partnership's depreciation, depletion and amortization (DD&A) rate, expressed as a percentage of oil and gas sales, was approximately 14 percent during the third quarter of 2005 compared to 22 percent during the same period in 2004. This decline in rate reflected the impact of higher oil and gas prices in the current year, reserves added from drilling in 2004 and the sale of the Partnership's interest in South Pass 83 as discussed under Capital Resources and Liquidity. The Partnership recognized $10,480 of accretion expense on the asset retirement obligation during the third quarter of 2005 and $35,038 for the first nine months of 2005, down slightly from the comparable periods in 2004 as a result of the sale of the South Pass 83 field. Lease operating expense (LOE) in the third quarter of 2005 was $161,000 higher than the third quarter of 2004, reflecting workover operations on the North Padre Island 976 A-3 and South Timbalier 295 A-18 wells, and maintenance on the North Padre Island platform. During the first nine months of 2005, LOE totaled $.9 million, up 55 percent from the same period in 2004 on higher repair and maintenance costs and workover costs. Gathering and transportation costs include amounts paid by the Partnership to third parties to transport oil and gas to a purchaser-specified delivery point. Such costs vary based on the volume and distance shipped, and the fee charged by the transporter, which may be price sensitive. The transportation cost may also vary from period to period based on marketing and delivery options utilized by the Partnership to realize the highest net price (gross price less transportation) for either oil or gas. Gathering and transportation costs during the third quarter and first nine months of 2005 were up slightly from the comparable periods in 2005. CAPITAL RESOURCES AND LIQUIDITY The Partnership's primary capital resource is net cash provided by operating activities, which totaled $8.9 million for the first nine months of 2005. Net cash provided by operating activities in 2005 was three percent above the $8.6 million reported a year ago, reflecting increases in oil and gas prices from 2004. Future cash flows will be influenced by fluctuations in product prices, production levels and operating costs. The Partnership's future financial condition, results of operations and cash from operating activities will largely depend upon prices received for its oil and natural gas production. 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 70 percent of the Partnership's production for the first nine months of 2005 and 62 percent of total proved reserves at December 31, 2004, on an energy equivalent basis, the Partnership is affected more by fluctuations in natural gas prices than in oil prices. The Partnership's oil and gas reserves and production will also significantly impact future results of operations and cash from operating activities. The Partnership's production is subject to fluctuations in response to remaining quantities of oil and gas reserves, weather, pipeline capacity, consumer demand, mechanical performance, and workover, recompletion and drilling activities. Declines in oil and gas production can be expected in future years as a result of 6
normal depletion and the Partnership not participating in acquisition or exploration activities. Based on production estimates from independent engineers and current market conditions, the Partnership expects it will be able to meet its liquidity needs for routine operations in the foreseeable future. The Partnership will reduce capital expenditures and distributions to partners as cash from operating activities declines. 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. However, the Managing Partner is not obligated to make loans to the Partnership. On an ongoing basis, the Partnership reviews the possible sale of lower value properties prior to incurring associated dismantlement and abandonment cost. In June 2005, the Partnership sold its interest in the South Pass 83 field to a third party for $136,252, subject to normal post closing adjustments. The purchaser also assumed all dismantlement and abandonment obligations for the property. The South Pass 83 field had insignificant levels of production at the time of the sale and the divestiture is not expected to materially impact future operating income. 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 or lease commitments at September 30, 2005. The Partnership did not have any contractual obligations as of September 30, 2005, other than the liability for dismantlement and abandonment costs of its oil and gas properties. The Partnership has recorded a separate liability for the fair value of its asset retirement obligations. The Partnership participated in drilling the Ship Shoal 259 JA-9 and JA-10 wells during the third quarter of 2005. The Partnership's oil and gas property expenditures during the first half were primarily for seismic costs. The JA-9 well was completed as a producing well in late August, while the JA-10 well was still being evaluated at the end of the third quarter. Based on information supplied by the operators of the properties, the Partnership anticipates capital expenditures for the remainder of 2005 of approximately $.5 million to participate in drilling in the Ship Shoal 258 JB-7 well during the fourth quarter and complete the Ship Shoal JA-10 well. Such estimates may change based on realized prices, drilling results or changes by the operator to the development plan. On March 17, 2005, the Partnership paid distributions to Investing Partners totaling $4.2 million, or $4,000 per Investing Partner unit. The Partnership made a cash distribution to Investing Partners during the first nine months of 2004 of $2,000 per Investing Partner Unit. The Partnership declared a distribution of $5,000 per Investing Partner Unit on September 12, 2005, that was payable to Unitholders on October 14, 2005. The amount of future distributions will be dependent on actual and expected production levels, realized and expected oil and gas prices, expected drilling and recompletion expenditures, and prudent cash reserves for future dismantlement and abandonment costs that will be incurred after the Partnership's reserves are depleted. As provided in the Amended Partnership Agreement, a first right of presentment offer for 2005 of $12,418 per Unit was offered to Investing Partners in April 2005, based on a valuation date of December 31, 2004. As a result, the Partnership purchased .25 Units in May 2005 for a total of $3,193. A second right of presentment offer for 2005 of $9,337 per Unit, plus interest to the date of payment, was made to Investing Partners on October 28, 2005, based on a valuation date of June 30, 2005. The Investing Partners have until the close of business on November 28, 2005 to present their Units for repurchase by the Partnership. The Partnership will determine by December 15, 2005, whether or not to accept each Unit offered during this election period. The Partnership is not in a position to predict how many Units will be presented for repurchase during the fourth quarter of 2005 and cannot, at this time, determine if the Partnership will have sufficient funds available to repurchase any Units. The Partnership has no obligation to purchase any Units presented to the extent it determines that it has insufficient funds for such purchases. The Amended Partnership Agreement contains limitations on the number of Units that the Partnership can repurchase, including a limit of 10 percent of the outstanding Units on an annual basis. 7
ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT 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. Prices received for oil and gas production have been and remain volatile and unpredictable. The Partnership has not used derivative financial instruments or otherwise engaged in hedging activities during 2004 or the first nine months of 2005. The information set forth under "Commodity Risk" in Item 7A of the Partnership's Form 10-K for the year ended December 31, 2004, is incorporated by reference. Information about market risks for the current quarter is not materially different. GOVERNMENTAL RISK The Partnership's operations have been, and at times in the future may be, affected by political developments and by federal, state and local laws and regulations impacting production levels, taxes, environmental requirements and other assessments including a potential windfall profits tax. ITEM 4 - CONTROLS AND PROCEDURES G. Steven Farris, the Managing Partner's President, Chief Executive Officer and Chief Operating Officer, and Roger B. Plank, the Managing Partner's Executive Vice President and Chief Financial Officer, evaluated the effectiveness of the Partnership's disclosure controls and procedures as of the end of the period covered by this report. Based on that evaluation and as of the date of that evaluation, these officers concluded that the Partnership's disclosure controls to be effective, providing effective means to insure that information it is required to disclose under applicable laws and regulations is recorded, processed, summarized and reported in a timely manner. Also, no significant changes were made in the Partnership's internal controls over financial reporting during the fiscal quarter ending September 30, 2005 that have materially affected, or are reasonably likely to materially affect, the Partnership's internal control over financial reporting. 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 on 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 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. 8
PART II - OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS None. ITEM 2. CHANGES IN SECURITIES, USE OF PROCEEDS AND ISSUER PURCHASES OF EQUITY SECURITIES None. ITEM 3. DEFAULTS UPON SENIOR SECURITIES None. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS None. ITEM 5. OTHER INFORMATION None. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K a. Exhibits 31.1 - Certification of Chief Executive Officer 31.2 - Certification of Chief Financial Officer 32.1 - Certification of Chief Executive Officer and Chief Financial Officer b. Reports filed on Form 8-K - None. 9
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 Dated: November 8, 2005 /s/ Roger B. Plank ---------------------------------------- Roger B. Plank Executive Vice President and Chief Financial Officer Dated: November 8, 2005 /s/ Thomas L. Mitchell ---------------------------------------- Thomas L. Mitchell Vice President and Controller (Chief Accounting Officer)
INDEX TO EXHIBITS Exhibit Number Description of Exhibit - ------- ---------------------- 31.1 Certification of Chief Executive Officer 31.2 Certification of Chief Financial Officer 32.1 Certification of Chief Executive Officer and Chief Financial Officer
EXHIBIT 31.1 CERTIFICATIONS I, G. Steven Farris, certify that: 1. I have reviewed this quarterly report on Form 10-Q of Apache Offshore Investment Partnership; 2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; (c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and (d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information ; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. /s/ G. Steven Farris - -------------------------------------- G. Steven Farris President, Chief Executive Officer and Chief Operating Officer of Apache Corporation, General Partner Date: November 8, 2005
EXHIBIT 31.2 CERTIFICATIONS I, Roger B. Plank, certify that: 1. I have reviewed this quarterly report on Form 10-Q of Apache Offshore Investment Partnership; 2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; (c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and (d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. /s/ Roger B. Plank - -------------------------------------- Roger B. Plank Executive Vice President and Chief Financial Officer of Apache Corporation, General Partner Date: November 8, 2005
EXHIBIT 32.1 APACHE OFFSHORE INVESTMENT PARTNERSHIP BY APACHE CORPORATION, GENERAL PARTNER CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER I, G. Steven Farris, certify that the Quarterly Report of Apache Offshore Investment Partnership on Form 10-Q for the quarterly period ending September 30, 2005, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. Section 78m or Section 78o (d)) and that information contained in such report fairly represents, in all material respects, the financial condition and results of operations of Apache Offshore Investment Partnership. /s/ G. Steven Farris - ----------------------------------------- By: G. Steven Farris Title: President, Chief Executive Officer and Chief Operating Officer I, Roger B. Plank, certify that the Quarterly Report of Apache Offshore Investment Partnership on Form 10-Q for the quarterly period ending September 30, 2005, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. Section 78m or Section 78o (d)) and that information contained in such report fairly represents, in all material respects, the financial condition and results of operations of Apache Offshore Investment Partnership. /s/ Roger B. Plank - ----------------------------------------- By: Roger B. Plank Title: Executive Vice President and Chief Financial Officer