e10vq
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended March 31, 2010
OR
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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)
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Delaware
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41-1464066 |
(State or other jurisdiction of
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(I.R.S. Employer |
incorporation or organization)
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Identification No.) |
One Post Oak Central, 2000 Post Oak Boulevard, Suite 100, Houston, Texas 77056-4400
(Address of principal executive offices)
Registrants 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 þ No o
Indicate by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be submitted and posted
pursuant to Rule 405 of Regulation S-T ((§232.405 of this chapter) during the preceding 12 months
(or for such shorter period that the registrant was required to submit and post such files).
Yes o No o
Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions
of large accelerated filer, accelerated filer and smaller reporting
company in Rule 12b-2 of the
Exchange Act. (Check one):
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Large accelerated filer o
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Accelerated filer o
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Non-accelerated filer o
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Smaller reporting company þ |
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(Do not check if a smaller reporting company) |
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Indicate by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act). Yes o No þ
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Number of registrants units outstanding as of March 31, 2010 |
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1,022 |
TABLE OF CONTENTS
PART I FINANCIAL INFORMATION
ITEM 1 FINANCIAL STATEMENTS
APACHE OFFSHORE INVESTMENT PARTNERSHIP
STATEMENT OF CONSOLIDATED INCOME
(Unaudited)
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For the Three Months |
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Ended March 31, |
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2010 |
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2009 |
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REVENUES: |
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Oil and gas sales |
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$ |
1,723,972 |
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$ |
1,131,168 |
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Interest income |
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4 |
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130 |
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1,723,976 |
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1,131,298 |
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EXPENSES: |
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Depreciation, depletion and amortization |
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360,373 |
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295,532 |
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Asset retirement obligation accretion |
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29,986 |
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16,459 |
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Lease operating expenses |
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253,045 |
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387,835 |
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Gathering and transportation costs |
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33,946 |
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19,967 |
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Administrative |
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109,250 |
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112,500 |
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786,600 |
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832,293 |
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NET INCOME |
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$ |
937,376 |
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$ |
299,005 |
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NET INCOME ALLOCATED TO: |
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Managing Partner |
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$ |
253,561 |
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$ |
115,563 |
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Investing Partners |
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683,815 |
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183,442 |
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$ |
937,376 |
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$ |
299,005 |
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NET INCOME PER INVESTING PARTNER UNIT |
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$ |
669 |
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$ |
180 |
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WEIGHTED AVERAGE INVESTING PARTNER
UNITS OUTSTANDING |
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1,021.5 |
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1,021.5 |
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The accompanying notes to financial statements
are an integral part of this statement.
1
APACHE OFFSHORE INVESTMENT PARTNERSHIP
STATEMENT OF CONSOLIDATED CASH FLOWS
(Unaudited)
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For the Three Months |
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Ended March 31, |
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2010 |
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2009 |
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CASH FLOWS FROM OPERATING ACTIVITIES: |
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Net income |
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$ |
937,376 |
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$ |
299,005 |
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Adjustments to reconcile net income to net cash
provided by operating activities: |
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Depreciation, depletion and amortization |
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360,373 |
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295,532 |
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Asset retirement obligation accretion |
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29,986 |
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16,459 |
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Dismantlement & abandonment cost |
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(81,076 |
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Changes in operating assets and liabilities: |
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(Increase) decrease in accrued revenues receivable |
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42,366 |
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196,239 |
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(Increase) decrease in receivable from
Apache Corporation |
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(101,963 |
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(84,281 |
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Increase (decrease) in accrued operating expenses |
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3,389 |
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2,005 |
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Net cash provided by operating activities |
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1,190,451 |
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724,959 |
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CASH FLOWS FROM INVESTING ACTIVITIES: |
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Additions to oil and gas properties |
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(188 |
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(473,815 |
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Net cash used in investing activities |
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(188 |
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(473,815 |
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CASH FLOWS FROM FINANCING ACTIVITIES: |
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Distributions to Investing Partners |
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Distributions to Managing Partner |
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(250,731 |
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(145,333 |
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Net cash used in financing activities |
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(250,731 |
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(145,333 |
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NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS |
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939,532 |
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105,811 |
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CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR |
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2,048,412 |
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1,131,615 |
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CASH AND CASH EQUIVALENTS, END OF PERIOD |
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$ |
2,987,944 |
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$ |
1,237,426 |
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The accompanying notes to financial statements
are an integral part of this statement.
2
APACHE OFFSHORE INVESTMENT PARTNERSHIP
CONSOLIDATED BALANCE SHEET
(Unaudited)
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March 31, |
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December 31, |
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2010 |
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2009 |
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ASSETS |
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CURRENT ASSETS: |
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Cash and cash equivalents |
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$ |
2,987,944 |
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$ |
2,048,412 |
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Accrued revenues receivable |
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277,368 |
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319,734 |
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Accrued insurance receivable |
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24,678 |
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24,678 |
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Receivable from Apache Corporation |
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184,865 |
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82,902 |
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3,474,855 |
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2,475,726 |
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OIL AND GAS PROPERTIES, on the basis of full cost accounting: |
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Proved properties |
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188,458,508 |
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188,458,320 |
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Less Accumulated depreciation, depletion and amortization |
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(183,058,551 |
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(182,698,178 |
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5,399,957 |
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5,760,142 |
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$ |
8,874,812 |
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$ |
8,235,868 |
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LIABILITIES AND PARTNERS CAPITAL |
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CURRENT LIABILITIES: |
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Accrued operating expenses |
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$ |
109,794 |
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$ |
106,405 |
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Accrued exploration and development |
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109,794 |
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106,405 |
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ASSET RETIREMENT OBLIGATION |
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1,992,805 |
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2,043,895 |
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PARTNERS CAPITAL: |
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Managing Partner |
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76,910 |
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74,080 |
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Investing Partners (1,021.5 units outstanding) |
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6,695,303 |
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6,011,488 |
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6,772,213 |
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6,085,568 |
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$ |
8,874,812 |
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$ |
8,235,868 |
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The accompanying notes to financial statements
are an integral part of this statement.
3
APACHE OFFSHORE INVESTMENT PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Apache Offshore Investment Partnership, a Delaware general partnership (the Investment
Partnership), was formed on October 31, 1983, consisting of Apache Corporation, a Delaware
corporation (Apache or the Managing Partner), as Managing Partner and public investors (the
Investing Partners). The Investment Partnership invested its entire capital in Apache Offshore
Petroleum Limited Partnership, a Delaware limited partnership (the Operating Partnership). The
primary business of the Investment Partnership is to serve as the sole limited partner of the
Operating Partnership. The accompanying financial statements include the accounts of both the
Investment Partnership and the Operating Partnership. The term Partnership, as used herein,
refers to the Investment Partnership or the Operating Partnership, as the case may be.
The financial statements included herein have been prepared by the Partnership, without audit,
pursuant to the rules and regulations of the Securities and Exchange Commission (SEC), 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 accounting principles generally accepted in the
United States (U.S. GAAP) 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 Partnerships latest annual report on Form 10-K.
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
As of March 31, 2010, the Partnerships significant accounting policies are consistent with
those discussed in Note 2 of its consolidated financial statements contained in the Annual Report
on Form 10-K for the fiscal year ended December 31, 2009.
Use of Estimates
The
preparation of financial statements in conformity with U.S. GAAP 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. Significant estimates with regard to
these financial statements include the estimate of proved oil and gas reserves and related present
value estimates of future net cash flow therefrom, the present value of asset retirement
obligations and contingency obligations. Actual results could differ from those estimates.
Recently Adopted Accounting Pronouncements
In February 2010, the Financial Accounting Standards Board issued Accounting Standards Update
(ASU) No. 2010-09, Subsequent Events, which amended the FASB Accounting Standards Codification
(ASC) Topic 855, Subsequent Events, to remove the requirement that SEC registrants disclose the
date through which management evaluated subsequent events in the financial statements. The
Partnership adopted ASU 2010-09 effective March 31, 2010. See discussion of subsequent events
below.
2. RECEIVABLE FROM APACHE CORPORATION
The receivable from Apache 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 in the month after the Partnerships transactions are processed and the
net results of operations are determined.
4
3. RIGHT OF PRESENTMENT
As provided in the Partnership Agreement, as amended (the Amended Partnership Agreement), a
first right of presentment valuation was computed during the first quarter of 2010. The per-unit
value was determined to be $15,411 based on the valuation date of December 31, 2009. The
Partnership will not repurchase any Units during the first half of 2010 as a result of the
Partnerships limited amount of cash available for discretionary purposes.
The Partnership is not in a position to predict how many Units will be presented for
repurchase during the remainder of 2010 and cannot, at this time, determine if the Partnership will
have sufficient funds available to repurchase any Units. The Partnership has no obligation to
purchase any Units presented to the extent it determines that it has insufficient funds for such
purchases.
4. ASSET RETIREMENT OBLIGATIONS
The following table is a reconciliation of the asset retirement obligation for the first three
months of 2010:
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Asset retirement obligation at December 31, 2009 |
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$ |
2,043,895 |
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Accretion expense |
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29,986 |
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Liabilities settled |
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(81,076 |
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Asset retirement obligation at March 31, 2010 |
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$ |
1,992,805 |
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The asset retirement obligations reflect the estimated present value of the amount of
dismantlement, removal, site reclamation and similar activities associated with our oil and gas
properties. The Partnership utilizes current retirement costs to estimate the expected cash
outflows for retirement obligations. To determine the current present value of this obligation,
some key assumptions the Partnership must estimate include the ultimate productive life of
properties, a risk adjusted discount rate, and an inflation factor. To the extent future revisions
to these assumptions impact the present value of the existing asset retirement obligation
liability, a corresponding adjustment is made to the oil and gas property balance.
5. SUBSEQUENT EVENTS
Subsequent events have been evaluated for recognition and disclosure through the date these
financial statements were filed with the SEC. No significant subsequent events have been
identified.
5
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ITEM 2
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS |
This discussion relates to Apache Offshore Investment Partnership (the Partnership) and should
be read in conjunction with the Partnerships consolidated financial statements as of March 31,
2010, and the period then ended and accompanying notes included under Part I, Item 1, of this
Quarterly Report on Form 10-Q, as well as its consolidated financial statement as of December 31,
2009, and the year then ended, and the related Managements Discussion and Analysis of Financial
Condition and Results of Operations, both of which are contained in the Partnerships Annual Report
on Form 10-K for the year ended December 31, 2009.
The Partnerships 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.
RESULTS OF OPERATIONS
Net Income and Revenue
The Partnership reported net income for the first quarter of 2010 of $0.9 million compared to
earnings of $0.3 million in the first quarter 2009. Net income per Investing Partner Unit
increased nearly four fold from a year ago, up from $180 per Unit in the first quarter 2009, to
$669 per Unit in the current quarter. Higher oil and gas prices, increased gas production and
lower operating expense contributed to the increase in earnings and net income per Investing
Partner Unit from 2009.
Total revenues for the first quarter of 2010 increased to $1.7 million in 2010, up from $1.1
million for the same period a year ago. The increase reflected higher realized oil and gas prices
in 2010 which increased 104 percent and 12 percent, respectively, from the first quarter of 2009
and increased gas production in 2010. Oil prices reached their highest level since the third
quarter of 2008, while gas prices reached their highest level since the fourth quarter of 2008.
The Partnerships oil, gas and natural gas liquids (NGL) production volume and price
information is summarized in the following table (gas volumes presented in thousand cubic feet
(Mcf) per day):
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For the Three Months |
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Ended March 31, |
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Increase |
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2010 |
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2009 |
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(Decrease) |
Gas volume Mcf per day |
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2,039 |
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1,587 |
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28 |
% |
Average gas price per Mcf |
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$ |
5.64 |
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$ |
5.02 |
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12 |
% |
Oil volume barrels per day |
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92 |
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113 |
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(19 |
)% |
Average oil price per barrel |
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$ |
76.95 |
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$ |
37.74 |
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104 |
% |
NGL volume barrels per day |
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11 |
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15 |
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(27 |
)% |
Average NGL price per barrel |
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$ |
54.65 |
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$ |
23.79 |
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130 |
% |
Oil and Gas Sales
Natural gas sales for the first quarter of 2010 totaled $1.0 million, up $318,000 or 44
percent from the first quarter of 2009 with less downtime and higher prices. Natural gas volumes
increased 28 percent from a year ago, increasing current sales by $229,000. The Partnerships
first quarter 2009 gas production was reduced as a rupture in a third-party gas pipeline
necessitated the shut-in of Matagorda Island 681/682 production for 42 days during the first
quarter 2009. Production from the field was not restored until August of 2009. The Partnerships
average realized natural gas price for the first quarter of 2010 increased $0.62 per Mcf from the
year-earlier period, boosting sales by $89,000.
The Partnerships crude oil sales for the first quarter of 2010 totaled $0.6 million, a 66
percent increase from the first quarter of 2009. A $39.21 per barrel, or 104 percent, increase in
the Partnerships average realized oil price increased sales approximately $0.4 million from the
first quarter of 2009. A 21 barrel per day decrease in the Partnerships oil production from the
first quarter of last year was attributable to natural declines in the South Timbalier 295 field
and the field being shut-in for 10 days during the current quarter for maintenance performed by the
operator of a third-party pipeline.
6
The Partnership sold an average of 11 barrels per day of natural gas liquids from processing
gas during the first quarter of 2010, a 27 percent decrease from 2009. The Partnerships realized
price for natural gas liquids increased to $54.65 in the first quarter of 2010.
Since the Partnership does not anticipate acquiring additional acreage or conducting
exploratory drilling on leases in which it currently holds an interest, declines in oil and gas
production can be expected in future periods as a result of natural depletion. Also, given the
small number of producing wells owned by the Partnership and exposure to inclement weather in the
Gulf of Mexico, the Partnerships future production may be subject to more volatility than those
companies with a larger or more diversified property portfolio.
Operating Expenses
The Partnerships depreciation, depletion and amortization (DD&A) rate, expressed, as a
percentage of oil and gas sales, was approximately 21 percent during the first quarter of 2010
compared to 26 percent during the same period in 2009. The lower DD&A rate as a percentage of
sales reflected higher oil and gas prices in 2010. On a per barrel of oil equivalent (boe) basis,
DD&A increased to $9.05 per boe in the first quarter of 2010 from $8.38 per boe in the comparable
period in 2009 with the higher asset retirement obligation cost recorded in the fourth quarter of
2009. During the first quarter of 2010, the Partnership recognized $29,986 of accretion expense on
the asset retirement obligation compared to $16,459 in the first quarter of 2009, as a result of
the higher asset retirement liability.
Lease operating expense (LOE) for the first quarter of 2010 of $253,045 decreased 35 percent
from the first quarter of 2009 on lower workover costs and repairs and maintenance costs. During
the first quarter of 2009, the Partnership participated in workovers on three wells at North Padre
Island and two wells at South Timbalier 295. Lease operating expense for the first quarter of 2009
also included repairs to a compressor on the South Timbalier 295 platform, and repairs for damage
to a boat landing caused by Hurricane Ike. Gathering and transportation cost increased from 2009
with the increased gas sales from Matagorda Island 681/682. Administrative expense decreased three
percent from the first quarter of 2009.
Capital Resources and Liquidity
The Partnerships primary capital resource is net cash provided by operating activities, which
totaled $1.2 million for the first three months of 2010. Net cash provided by operating activities
in the quarter was up 64 percent from a year ago as a result of increases in oil and gas prices,
higher gas production and lower operating expenses. Future cash flows will be influenced by
fluctuations in these same components.
At March 31, 2010, the Partnership had approximately $3.0 million in cash and cash
equivalents, up from approximately $2.0 million at December 31, 2009. The Partnership intends to
maintain cash and cash equivalents in the Partnership at least sufficient to cover the discounted
value of its future asset retirement obligations. The Partnership increased its cash balances
during the first quarter of 2010 to help fund development cost planned for the remainder of 2010.
The Partnerships 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 Partnerships 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 Partnerships 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.
The Partnerships oil and gas reserves and production will also significantly impact future
results of operations and cash from operating activities. The Partnerships 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 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 decline.
7
In the event that future short-term operating cash requirements are greater than the
Partnerships financial resources, the Partnership may seek short-term, interest-bearing advances
from the Managing Partner as needed. The Managing Partner, however, 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 costs.
Capital Commitments
The Partnerships 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. To the extent
there is discretion, the Partnership allocates available capital to investment in the Partnerships
properties so as to maximize production and resultant cash flow. The Partnership had no
outstanding debt or lease commitments at March 31, 2010. The Partnership did not have any
contractual obligations as of March 31, 2010, other than the liability for dismantlement and
abandonment costs of its oil and gas properties. The Partnership has recorded a separate liability
for the present value of this asset retirement obligation as discussed in the notes to the
financial statements included in the Partnerships latest annual report on Form 10-K.
The Partnership had only incidental capital expenditures during the first quarter of 2010.
The Partnership expects to utilize available funds to participate in drilling four wells at Ship
Shoal 258/259 during remainder of 2010. The Partnership also plans to participate in recompletions
at South Timbalier 295 and North Padre Island 969/976 during 2010 to help maintain production and
develop the Partnerships proved undeveloped reserves. Based on information supplied by the
operators of the properties, the Partnership anticipates capital expenditures of approximately $3.0
million for the remainder of 2010. Such estimates may change based on realized prices, drilling
results, changes by the operator to the development plan or changes in government regulations.
No distributions were made to Investing Partners during the first quarter of 2010, as cash
balances were increased to fund capital expenditures planned for the remainder of 2010. The
Partnership made no distribution to Investing Partners during the first quarter of 2009 as oil and
gas prices were low and the Matagorda Island 681/682 field was shut-in for part of the quarter.
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 Partnerships reserves are depleted. The Partnership intends to maintain cash and cash
equivalents in the Partnership at least sufficient to cover the discounted value of its future
asset retirement obligations. If commodity prices remain at or decline from levels realized during
the first quarter of 2010 and the Partnership participates in the planned development projects
noted above, the Partnership will most likely not be able to fund a distribution to Investing
Partners during 2010.
As provided in the Partnership Agreement, as amended (the Amended Partnership Agreement), a
first right of presentment valuation was computed during the first quarter of 2010. The per-unit
value was determined to be $15,411 based on the valuation date of December 31, 2009. The
Partnership will not repurchase any Units during the first half of 2010, as a result of the
Partnerships limited amount of cash available for discretionary purposes.
The Partnership is not in a position to predict how many Units will be presented for
repurchase during the remainder of 2010 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.
Potential Impact of Deepwater Horizon Explosion and Oil Spill on Gulf of Mexico Operations
On April 22, 2010, a deepwater Gulf of Mexico drilling rig, Deepwater Horizon, operating on
Mississippi Canyon Block 252 sank after an apparent blowout and fire. Although attempts are being
made to seal the well, hydrocarbons have been leaking and the spill area continues to grow. The
Partnership does not have any ownership in the field and as of this date, the spill has not
affected the Partnerships current operations. However, the Partnership cannot predict at this
time the potential impact of the incident and resulting spill on our future drilling activity or
operations or how government agencies may respond with changes in laws and regulations pertaining
to the Gulf of Mexico.
8
ITEM 3 QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Partnerships 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 2009 or the
first three months of 2010.
The information set forth under Commodity Risk in Item 7A of the Partnerships Form 10-K for
the year ended December 31, 2009, is incorporated by reference. Information about market risks for
the current quarter is not materially different.
ITEM 4 CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
G. Steven Farris, the Managing Partners Chairman and Chief Executive Officer (in his capacity
as principal executive officer), and Roger B. Plank, the Managing Partners President (in his
capacity as principal financial officer), evaluated the effectiveness of the Partnerships
disclosure controls and procedures as of March 31, 2010, 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 Partnerships disclosure controls and procedures were effective, providing effective means
to ensure that the information it is required to disclose under applicable laws and regulations is
recorded, processed, summarized and reported within the time periods specified in the Commissions
rules and forms and communicated to our management, including the Managing Partners principal
executive officer and principal financial officer, to allow timely decisions regarding required
disclosure.
There was no change in our internal controls over financial reporting during the period
covered by this quarterly report on Form 10-Q that materially affected, or is reasonably likely to
materially affect, our internal controls over financial reporting.
FORWARD-LOOKING STATEMENTS AND RISK
This report includes forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. All statements other than statements of historical facts included or incorporated by
reference in this report, including, without limitation, statements regarding our future financial
position, business strategy, budgets, projected revenues, projected costs and plans and objectives
of management for future operations, are forward-looking statements. Such forward-looking
statements are based on our examination of historical operating trends, the information that was
used to prepare our estimate of proved reserves as of December 31, 2009 and other data in our
possession or available from third parties. In addition, forward-looking statements generally can
be identified by the use of forward-looking terminology such as may, will, expect, intend,
project, estimate, anticipate, believe, or continue or similar terminology. Although we
believe that the expectations reflected in such forward-looking statements are reasonable, we can
give no assurance that such expectations will prove to have been correct. Important factors that
could cause actual results to differ materially from our expectations include, but are not limited
to, our assumptions about:
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the market prices of oil, natural gas, NGLs and other products or services; |
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the supply and demand for oil, natural gas, NGLs and other products or services; |
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production and reserve levels; |
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drilling risks; |
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economic and competitive conditions; |
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the availability of capital resources;
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9
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capital expenditure and other contractual obligations; |
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weather conditions; |
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inflation rates; |
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the availability of goods and services; |
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legislative or regulatory changes; |
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terrorism; |
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occurrence of property acquisitions or divestitures; |
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the securities or capital markets and related risks such as general credit, liquidity,
market and interest-rate risks; and |
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other factors disclosed under Items 1 and 2 Business and Properties Estimated
Proved Reserves and Future Net Cash Flows, Item 1A Risk Factors, Item 7
Managements Discussion and Analysis of Financial Condition and Results of Operations,
Item 7A Quantitative and Qualitative Disclosures About Market Risk and elsewhere in our
most recently filed Form 10-K. |
All subsequent written and oral forward-looking statements attributable to the Partnership, or
persons acting on its behalf, are expressly qualified in their entirety by the cautionary
statements. We assume no duty to update or revise our forward-looking statements based on changes
in internal estimates or expectations or otherwise.
10
PART II OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None.
ITEM 1A. RISK FACTORS
During the quarter ended March 31, 2010, there were no material changes from the risk
factors as previously disclosed in the Partnerships Form 10-K for the year ended
December 31, 2009.
ITEM 2. UNREGISTERED SALES OF EQUITY IN SECURITIES AND USE OF PROCEEDS
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS
a. Exhibits
*3.1 |
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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). |
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*3.2 |
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Amendment No. 1, dated February 11, 1994, to the Partnership
Agreement of Apache Offshore Investment Partnership (incorporated by reference
to Exhibit 3.3 to Partnerships Annual Report on Form 10-K for the year ended
December 31, 1993, Commission File No. 0-13546). |
|
*3.3 |
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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). |
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**31.1 |
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Certification (pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Exchange
Act) by Principal Executive Officer |
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**31.2 |
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Certification (pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Exchange
Act) by Principal Financial Officer |
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**32.1 |
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Section 1350 Certification (pursuant to Sarbanes-Oxley Section 906) by
Principal Executive Officer and Principal Financial Officer |
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* |
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Incorporated by reference herein. |
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** |
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Filed herewith. |
11
SIGNATURES
Pursuant to the requirements 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.
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APACHE OFFSHORE INVESTMENT PARTNERSHIP
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By: |
Apache Corporation, Managing Partner
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Dated: May 7, 2010 |
/s/ Roger B. Plank
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Roger B. Plank |
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President (principal financial officer)
of Apache Corporation, Managing Partner |
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Dated: May 7, 2010 |
/s/ Rebecca A. Hoyt
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Rebecca A. Hoyt |
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Vice President and Controller (principal accounting officer)
of Apache Corporation, Managing Partner |
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exv31w1
Exhibit 31.1
CERTIFICATIONS
I, G. Steven Farris, certify that:
1. |
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I have reviewed this quarterly report on Form 10-Q of Apache Offshore Investment Partnership; |
2. |
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Based on my knowledge, this 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 report; |
3. |
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Based on my knowledge, the financial statements, and other financial information included in
this 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
report; |
4. |
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The registrants 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: |
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(a) |
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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; |
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(b) |
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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; |
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(c) |
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Evaluated the effectiveness of the registrants 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 |
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(d) |
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Disclosed in this report any change in the registrants internal control over financial
reporting that occurred during the registrants most recent fiscal quarter that has
materially affected, or is reasonably likely to materially affect, the registrants
internal control over financial reporting; and |
5. |
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The registrants other certifying officer and I have disclosed, based on our most recent
evaluation of internal control over financial reporting, to the registrants auditors and the
audit committee of the registrants board of directors (or persons performing the equivalent
functions): |
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(a) |
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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 registrants ability to record, process, summarize and report financial information ;
and |
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(b) |
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Any fraud, whether or not material, that involves management or other employees who
have a significant role in the registrants internal control over financial reporting. |
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/s/ G. Steven Farris |
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Chairman and Chief Executive Officer (principal executive officer)
of Apache Corporation, Managing Partner |
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Date: May 7, 2010
exv31w2
Exhibit 31.2
CERTIFICATIONS
I, Roger B. Plank, certify that:
1. |
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I have reviewed this quarterly report on Form 10-Q of Apache Offshore Investment Partnership; |
2. |
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Based on my knowledge, this 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 report; |
3. |
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Based on my knowledge, the financial statements, and other financial information included in
this 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
report; |
4. |
|
The registrants 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) |
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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; |
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(b) |
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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; |
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(c) |
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Evaluated the effectiveness of the registrants 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 |
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(d) |
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Disclosed in this report any change in the registrants internal control over
financial reporting that occurred during the registrants most recent fiscal quarter that
has materially affected, or is reasonably likely to materially affect, the registrants
internal control over financial reporting; and |
5. |
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The registrants other certifying officer and I have disclosed, based on our most recent
evaluation of internal control over financial reporting, to the registrants auditors and the
audit committee of the registrants board of directors (or persons performing the equivalent
functions): |
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(a) |
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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 registrants ability to record, process, summarize and report financial information;
and |
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(b) |
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Any fraud, whether or not material, that involves management or other employees who
have a significant role in the registrants internal control over financial reporting. |
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/s/ Roger B. Plank |
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President (principal financial officer)
of Apache Corporation, Managing Partner |
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Date: May 7, 2010
exv32w1
Exhibit 32.1
APACHE OFFSHORE INVESTMENT PARTNERSHIP
by Apache Corporation, Managing Partner
Certification of Principal Executive Officer
and Principal Financial Officer
I, G. Steven Farris, certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge, the quarterly report on Form
10-Q of Apache Offshore Investment Partnership for the quarterly period ending March 31, 2010,
fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of
1934 (15 U.S.C. §78m or §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.
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/s/ G. Steven Farris |
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By:
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G. Steven Farris |
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Title:
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Chairman and Chief Executive Officer (principal executive officer)
of Apache Corporation, Managing Partner |
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Date:
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May 7, 2010 |
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I, Roger B. Plank, certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge, the quarterly report on Form 10-Q of
Apache Offshore Investment Partnership for the quarterly period ending March 31, 2010, fully
complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15
U.S.C. §78m or §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.
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/s/ Roger B. Plank |
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By:
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Roger B. Plank |
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Title:
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President (principal financial officer)
of Apache Corporation, Managing Partner |
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Date: May 7, 2010