0001673379-19-000019 | 10-Q | XBRL Viewer | Apache Offshore Investment Partnership

STATEMENT OF CONSOLIDATED OPERATIONS (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
REVENUES:
Oil and gas sales	$ 299,511	$ 354,408
Interest income	27,858	13,899
Total Revenues	327,369	368,307
EXPENSES:
Depreciation, depletion and amortization	71,013	81,622
Asset retirement obligation accretion	19,451	26,249
Lease operating expenses	115,607	126,734
Gathering and transportation costs	4,770	4,983
Administrative	82,134	80,803
Total Expenses	292,975	320,391
NET INCOME	34,394	47,916
NET INCOME ALLOCATED TO:
Managing Partner	15,516	22,506
Investing Partners	18,878	25,410
NET INCOME	$ 34,394	$ 47,916
NET INCOME PER INVESTING PARTNER UNIT (in USD per share)	$ 18	$ 25
WEIGHTED AVERAGE INVESTING PARTNER UNITS OUTSTANDING (in shares)	1,021.5	1,021.5

CONSOLIDATED BALANCE SHEET (Unaudited) (Parenthetical) - shares	Mar. 31, 2019	Dec. 31, 2018
Statement of Financial Position [Abstract]
Investing Partners, units outstanding	1,021.5	1,021.5

RECEIVABLE FROM / PAYABLE TO APACHE CORPORATION	3 Months Ended
RECEIVABLE FROM / PAYABLE TO APACHE CORPORATION	Mar. 31, 2019
Related Party Transactions [Abstract]
RECEIVABLE FROM / PAYABLE TO APACHE CORPORATION	RECEIVABLE FROM / PAYABLE TO APACHE CORPORATIONThe receivable from/payable to Apache represents the net result of the Investing Partners’ revenue received and expenditures paid 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.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Additional Information (Details) - USD ($)	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Dec. 31, 2018
Accounting Policies [Abstract]
Impairment of oil and gas properties	$ 0	$ 0
Revenue from contract with customers	299,511	$ 354,408
Receivables from contracts with customers	$ 113,668		$ 120,116

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

3 Months Ended

Mar. 31, 2019

Accounting Policies [Abstract]

Disaggregation of Revenue

The table below presents the total oil, gas, and NGLs revenues of the Partnership for the quarters ended March 31, 2019 and 2018:



	Quarter Ended March 31,
	2019		2018


Oil	$	262,883	$	314,487
Gas	31,561		31,125
NGLs	5,067		8,796
Total Oil and Gas Revenue	$	299,511	$	354,408

ASSET RETIREMENT OBLIGATIONS (Tables)

3 Months Ended

Mar. 31, 2019

Asset Retirement Obligation Disclosure [Abstract]

Changes to Partnership's Asset Retirement Obligation Liability

The following table describes the changes to the Partnership’s asset retirement obligation liability for the first three months of 2019:



Asset retirement obligation at December 31, 2018	$	1,635,812
Accretion expense	19,451
Liabilities settled	(2,553		)
Revisions in estimated liabilities	79,993
Asset retirement obligation at March 31, 2019	1,732,703
Less current portion	(405,725		)
Asset retirement obligation, long-term	$	1,326,978

Document and Entity Information	3 Months Ended
Document and Entity Information	Mar. 31, 2019 shares
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2019
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q1
Trading Symbol	AOIP
Entity Registrant Name	APACHE OFFSHORE INVESTMENT PARTNERSHIP
Entity Central Index Key	0000727538
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Entity Emerging Growth Company	false
Entity Small Business	true
Entity Common Stock, Shares Outstanding	1,022

STATEMENT OF CONSOLIDATED CASH FLOWS (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$ 34,394	$ 47,916
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, depletion and amortization	71,013	81,622
Asset retirement obligation accretion	19,451	26,249
Changes in operating assets and liabilities:
Accrued receivables	6,448	(32,644)
Receivable from/payable to Apache Corporation	543	(3,225)
Accrued operating expenses	(14,414)	(9,441)
Asset retirement obligations	(127,416)	0
Net cash provided by (used in) operating activities	(9,981)	110,477
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to oil and gas properties	0	(156,273)
Net cash used in investing activities	0	(156,273)
CASH FLOWS FROM FINANCING ACTIVITIES:
Distributions to Managing Partner	(5,066)	(5,665)
Net cash used in financing activities	(5,066)	(5,665)
NET DECREASE IN CASH AND CASH EQUIVALENTS	(15,047)	(51,461)
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR	5,103,336	5,117,485
CASH AND CASH EQUIVALENTS, END OF PERIOD	$ 5,088,289	$ 5,066,024

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

3 Months Ended

Mar. 31, 2019

Accounting Policies [Abstract]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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.These financial statements have been prepared by the Partnership, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). They reflect all adjustments that 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, with the exception of recently adopted accounting pronouncements discussed below. 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 Partnership’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018, which contains a summary of the Partnership’s significant accounting policies and other disclosures.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

As of March 31, 2019, the Partnership’s 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, 2018, with the exception of Accounting Standards Update (ASU) 2016-02, “Leases (Topic 842)” (see “Recently Adopted Accounting Pronouncement” section in this Note 1 below).

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 reserve quantities and the related present value of estimated future net cash flows therefrom and the assessment of asset retirement obligations. Actual results could differ from those estimates.

Oil and Gas Property

The Partnership follows the full-cost method of accounting for its oil and gas property. Under this method of accounting, all costs incurred for both successful and unsuccessful exploration and development activities, and oil and gas property acquisitions are capitalized. The net book value of oil and gas properties may not exceed a calculated “ceiling.” The ceiling limitation is the estimated future net cash flows from proved oil and gas reserves, discounted at 10 percent per annum. Estimated future net cash flows are calculated using end-of-period costs and an unweighted arithmetic average of commodity prices in effect on the first day of each of the previous 12 months, held flat for the life of the production, except where prices are defined by contractual arrangements. For a discussion of the calculation of estimated future net cash flows, please refer to Note 10—Supplemental Oil and Gas Disclosures to the consolidated financial statements contained in the Partnership’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018.

Any excess of the net book value of proved oil and gas properties over the ceiling is charged to expense and reflected as “Additional depreciation, depletion and amortization” in the accompanying statement of consolidated operations. Such limitations are tested quarterly. The Partnership had no non-cash write-downs of the carrying value of its proved oil and gas properties during the first quarters of 2019 and 2018.

Revenue Recognition

The Partnership applies the provisions of ASC 606 for revenue recognition to contracts with customers. Sales of crude oil, natural gas, and natural gas liquids (NGLs) are included in revenue when production is sold to a customer in fulfillment of performance obligations under the terms of agreed contracts. Performance obligations primarily comprise delivery of oil, gas, or NGLs at a delivery point, as negotiated within each contract. Each barrel of oil, MMBtu of natural gas, or other unit of measure is separately identifiable and represents a distinct performance obligation to which the transaction price is allocated. Performance obligations are satisfied at a point in time once control of the product has been transferred to the customer. The Partnership considers a variety of facts and circumstances in assessing the point of control transfer, including but not limited to: whether the purchaser can direct the use of the hydrocarbons, the transfer of significant risks and rewards, the Partnership’s right to payment, and transfer of legal title. In each case, the term between delivery and when payments are due is not significant. For the three months ended March 31, 2019 and 2018, revenues from customers totaled $299,511 and $354,408, respectively.

Apache, as Managing Partner of the Partnership, markets the Partnership's share of oil production from South Timbalier 295, the Partnership's largest source of revenue. Apache primarily markets to major oil companies, marketing and transportation companies, and refiners at current index prices, adjusted for quality, transportation, and market reflective differentials. The Partnership markets all other production under the joint operating agreements with the operator of its properties. The operator seeks and negotiates oil and gas marketing arrangements with various marketers and purchasers. These contracts provide for sales that are priced at prevailing market prices.

The Partnership records trade accounts receivable for its unconditional rights to consideration arising under sales contracts with customers. The carrying value of such receivables, net of the allowance for doubtful accounts, represents estimated net realizable value. The Partnership routinely assesses the collectability of all material trade and other receivables. The Partnership accrues a reserve on a receivable when, based on the judgment of management, it is probable that a receivable will not be collected and the amount of any reserve may be reasonably estimated. As of March 31, 2019, the carrying amounts of trade accounts receivables approximate fair value because of the short-term nature of these instruments. Receivables from contracts with customers, net of allowance for doubtful accounts, totaled $113,668 and $120,116 as of March 31, 2019 and December 31, 2018, respectively.

The Partnership has concluded that disaggregating revenue by product appropriately depicts how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors. The table below presents the total oil, gas, and NGLs revenues of the Partnership for the quarters ended March 31, 2019 and 2018:



	Quarter Ended March 31,
	2019		2018


Oil	$	262,883	$	314,487
Gas	31,561		31,125
NGLs	5,067		8,796
Total Oil and Gas Revenue	$	299,511	$	354,408

Recently Adopted Accounting Pronouncement

On January 1, 2019, the Partnership adopted ASU 2016-02, “Leases (Topic 842)” on a prospective basis. The Partnership elected to adopt two transitional practical expedients issued by the FASB during 2018: (i) ASU 2018-01, which permits an entity an optional election to not evaluate under ASU 2016-02 those existing or expired land easements that were not previously accounted for as leases prior to the adoption of ASU 2016-02 and (ii) ASU 2018-11, which adds a transition option permitting entities to apply the provisions of the new standard at its adoption date instead of the earliest comparative period presented in the consolidated financial statements. Under this transition option, comparative reporting would not be required and the provisions of the standard would be applied prospectively to leases in effect at the date of adoption. The adoption of ASU 2016-02 did not have a material impact on the Partnership’s consolidated financial statements.

ASSET RETIREMENT OBLIGATIONS (Detail) - USD ($)	3 Months Ended
ASSET RETIREMENT OBLIGATIONS (Detail) - USD ($)	Mar. 31, 2019	Mar. 31, 2018	Dec. 31, 2018
Asset Retirement Obligation, Roll Forward Analysis [Roll Forward]
Asset retirement obligation, beginning balance	$ 1,635,812
Accretion expense	19,451	$ 26,249
Liabilities settled	(2,553)
Revisions in estimated liabilities	79,993
Asset retirement obligation, ending balance	1,732,703
Less current portion	(405,725)		$ (390,000)
Asset retirement obligation, long-term	$ 1,326,978		$ 1,245,812

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Disaggregation of Revenue (Details) - USD ($)	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Disaggregation of Revenue [Line Items]
Oil and gas revenue	$ 299,511	$ 354,408
Oil
Disaggregation of Revenue [Line Items]
Oil and gas revenue	262,883	314,487
Gas
Disaggregation of Revenue [Line Items]
Oil and gas revenue	31,561	31,125
NGLs
Disaggregation of Revenue [Line Items]
Oil and gas revenue	$ 5,067	$ 8,796

CONSOLIDATED BALANCE SHEET (Unaudited) - USD ($)	Mar. 31, 2019	Dec. 31, 2018
CURRENT ASSETS:
Cash and cash equivalents	$ 5,088,289	$ 5,103,336
Accrued revenues receivable	113,668	120,116
Total Current Assets	5,201,957	5,223,452
OIL AND GAS PROPERTIES, on the basis of full cost accounting:
Proved properties	195,407,289	195,327,296
Less – Accumulated depreciation, depletion and amortization	(191,266,197)	(191,195,184)
Total oil and gas properties, on the basis of full cost accounting	4,141,092	4,132,112
Total Assets	9,343,049	9,355,564
CURRENT LIABILITIES:
Payable to Apache Corporation	1,615	1,072
Asset retirement obligation	405,725	390,000
Accrued operating expenses	77,000	91,414
Accrued development costs	1,136	125,999
Total Current Liabilities	485,476	608,485
ASSET RETIREMENT OBLIGATION	1,326,978	1,245,812
PARTNERS' CAPITAL:
Managing Partner	474,636	464,186
Investing Partners (1,021.5 units outstanding)	7,055,959	7,037,081
Total Partners' Capital	7,530,595	7,501,267
Total liabilities and partners' capital	$ 9,343,049	$ 9,355,564

ASSET RETIREMENT OBLIGATIONS

3 Months Ended

Mar. 31, 2019

Asset Retirement Obligation Disclosure [Abstract]

ASSET RETIREMENT OBLIGATIONS

The following table describes the changes to the Partnership’s asset retirement obligation liability for the first three months of 2019:



Asset retirement obligation at December 31, 2018	$	1,635,812
Accretion expense	19,451
Liabilities settled	(2,553		)
Revisions in estimated liabilities	79,993
Asset retirement obligation at March 31, 2019	1,732,703
Less current portion	(405,725		)
Asset retirement obligation, long-term	$	1,326,978

NOTICE OF WITHDRAWAL AND RIGHT OF PRESENTMENT	3 Months Ended
NOTICE OF WITHDRAWAL AND RIGHT OF PRESENTMENT	Mar. 31, 2019
Equity [Abstract]
RIGHT OF PRESENTMENT	NOTICE OF WITHDRAWAL AND RIGHT OF PRESENTMENT As previously announced, Apache, as the Managing Partner of the Investment Partnership gave notice on March 22, 2019 of its intention to withdraw as managing general partner of the Investment Partnership. The notice described the withdrawal process and certain notice periods required by that process. The Managing Partner expects that, unless certain events occur as described in the notice, an event of dissolution will occur for the Investment Partnership, and the Managing Partner will begin winding up and liquidating the business and affairs of the Investment Partnership after July 20, 2019. On April 26, 2019, the Managing Partner determined that, during the withdrawal and dissolution process, it would be inconsistent with the Managing Partner’s fiduciary duties to purchase (or to cause the Investment Partnership to purchase) outstanding units of partnership interests (“Units”) from the holders thereof pursuant to the right of presentment provided for in Sections 6.9 through 6.14 of the Partnership Agreement of the Investment Partnership (the “Partnership Agreement”). As a result of this determination by the Managing Partner, pursuant to Section 6.12 of the Partnership Agreement, the right of presentment has been terminated and Sections 6.9 through 6.14 have “become null and void and of no further force or effect” as provided in Section 6.12. The Investment Partnership has not made a repurchase under the right of presentment since 2008.

STATEMENT OF CONSOLIDATED CHANGES IN PARTNERS' CAPITAL - USD ($)	Total	Managing Partner	Investing Partners
BEGINNING BALANCE at Dec. 31, 2017	$ 7,282,625	$ 419,576	$ 6,863,049
Distributions	(5,665)	(5,665)
Net income	47,916	22,506	25,410
ENDING BALANCE at Mar. 31, 2018	7,324,876	436,417	6,888,459
BEGINNING BALANCE at Dec. 31, 2018	7,501,267	464,186	7,037,081
Distributions	(5,066)	(5,066)
Net income	34,394	15,516	18,878
ENDING BALANCE at Mar. 31, 2019	$ 7,530,595	$ 474,636	$ 7,055,959

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References + Details

FAIR VALUE MEASUREMENTS	3 Months Ended
FAIR VALUE MEASUREMENTS	Mar. 31, 2019
Fair Value Disclosures [Abstract]
FAIR VALUE MEASUREMENTS	FAIR VALUE MEASUREMENTS Certain assets and liabilities are reported at fair value on a recurring basis in the Partnership’s consolidated balance sheet. As of March 31, 2019 and December 31, 2018, the carrying amounts of the Partnership’s current assets and current liabilities approximated fair value because of the short-term nature or maturity of these instruments. The Partnership did not use derivative financial instruments or otherwise engage in hedging activities during the three months ended March 31, 2019 and 2018.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

3 Months Ended

Mar. 31, 2019

Accounting Policies [Abstract]

Use of Estimates

Use of EstimatesThe 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 reserve quantities and the related present value of estimated future net cash flows therefrom and the assessment of asset retirement obligations. Actual results could differ from those estimates.

Oil and Gas Property

Revenue Recognition



	Quarter Ended March 31,
	2019		2018


Oil	$	262,883	$	314,487
Gas	31,561		31,125
NGLs	5,067		8,796
Total Oil and Gas Revenue	$	299,511	$	354,408

Recently Adopted Accounting Pronouncement

Recently Adopted Accounting PronouncementOn January 1, 2019, the Partnership adopted ASU 2016-02, “Leases (Topic 842)” on a prospective basis. The Partnership elected to adopt two transitional practical expedients issued by the FASB during 2018: (i) ASU 2018-01, which permits an entity an optional election to not evaluate under ASU 2016-02 those existing or expired land easements that were not previously accounted for as leases prior to the adoption of ASU 2016-02 and (ii) ASU 2018-11, which adds a transition option permitting entities to apply the provisions of the new standard at its adoption date instead of the earliest comparative period presented in the consolidated financial statements. Under this transition option, comparative reporting would not be required and the provisions of the standard would be applied prospectively to leases in effect at the date of adoption. The adoption of ASU 2016-02 did not have a material impact on the Partnership’s consolidated financial statements.