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, 2003 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 2000 Post Oak Boulevard, Houston, TX 77056-4400 - ---------------------------------------- ---------- (Address of Principal Executive Offices) (Zip Code) 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, ------------------------------ ----------------------------- 2003 2002 2003 2002 ------------- ------------- ------------- ------------- REVENUES: Oil and gas sales $ 2,938,759 $ 1,668,501 $ 9,145,409 $ 4,786,809 Interest income 8,626 5,574 18,409 15,932 Other revenue 14,567 - 14,567 - ------------- ------------- ------------- ------------- 2,961,952 1,674,075 9,178,385 4,802,741 ------------- ------------- ------------- ------------- EXPENSES: Depreciation, depletion and amortization 753,110 589,566 2,198,496 1,578,239 Asset retirement obligation accretion 9,468 - 27,997 - Lease operating expense 182,551 171,870 632,169 497,208 Gathering and transportation expense 10,115 15,727 99,300 71,264 Administrative 96,000 115,000 306,000 345,000 ------------- ------------- ------------- ------------- 1,051,244 892,163 3,263,962 2,491,711 ------------- ------------- ------------- ------------- OPERATING INCOME BEFORE CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE 1,910,708 781,912 5,914,423 2,311,030 ============= ============= ============= ============= Cumulative effect of change in accounting principle - - 302,407 - ============= ============= ============= ============= NET INCOME $ 1,910,708 $ 781,912 $ 6,216,830 $ 2,311,030 ============= ============= ============= ============= NET INCOME ALLOCATED TO: Managing Partner $ 508,426 $ 244,735 $ 1,549,814 $ 698,320 Investing Partners 1,402,282 537,177 4,667,016 1,612,710 ------------- ------------- ------------- ------------- $ 1,910,708 $ 781,912 $ 6,216,830 $ 2,311,030 ============= ============= ============= ============= NET INCOME PER INVESTING PARTNER UNIT $ 1,321 $ 490 $ 4,340 $ 1,461 ============= ============= ============= ============= WEIGHTED AVERAGE INVESTING PARTNER UNITS OUTSTANDING 1,061.7 1,095.2 1,075.4 1,104.0 ============= ============= ============= ============= 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, ------------------------------------- 2003 2002 --------------- --------------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 6,216,830 $ 2,311,030 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation, depletion and amortization 2,198,496 1,578,239 Asset retirement obligation accretion 27,997 - Cumulative effect of change in accounting principle (302,407) - Changes in operating assets and liabilities: (Increase) decrease in accrued revenues receivable 17,154 (56,114) Increase (decrease) in accrued operating expenses 24,716 (54,281) (Increase) decrease in payable to/receivable from Apache Corporation (142,800) (298,993) --------------- --------------- Net cash provided by operating activities 8,039,986 3,479,881 --------------- --------------- CASH FLOWS FROM INVESTING ACTIVITIES: Additions to oil and gas properties (1,697,747) (2,678,465) Non-cash portion of oil and gas property additions 49,944 (259,732) --------------- --------------- Net cash used in investing activities (1,647,803) (2,938,197) --------------- --------------- CASH FLOWS FROM FINANCING ACTIVITIES: Repurchase of Partnership Units (285,936) (134,477) Distributions to Investing Partners (542,445) - Distributions to Managing Partner (1,591,827) (689,347) --------------- --------------- Net cash used in financing activities (2,420,208) (823,824) --------------- --------------- NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 3,971,975 (282,140) CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 915,891 1,883,386 --------------- --------------- CASH AND CASH EQUIVALENTS, END OF PERIOD $ 4,887,866 $ 1,601,246 =============== =============== 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, 2003 2002 --------------- ---------------- ASSETS CURRENT ASSETS: Cash and cash equivalents $ 4,887,866 $ 915,891 Accrued revenues receivable 598,010 615,164 Receivable from Apache Corporation 18,848 - --------------- ---------------- 5,504,724 1,531,055 --------------- ---------------- OIL AND GAS PROPERTIES, on the basis of full cost accounting: Proved properties 181,680,382 179,656,827 Less - Accumulated depreciation, depletion and amortization (172,821,289) (171,353,743) --------------- ---------------- 8,859,093 8,303,084 --------------- ---------------- $ 14,363,817 $ 9,834,139 =============== =============== LIABILITIES AND PARTNERS' CAPITAL CURRENT LIABILITIES: Distributions payable $ 4,246,868 $ - Accrued development costs 101,757 51,813 Accrued operating expenses 73,194 48,478 Payable to Apache Corporation - 123,952 --------------- ---------------- 4,421,819 224,243 --------------- ---------------- ASSET RETIREMENT OBLIGATION 782,348 - --------------- ---------------- PARTNERS' CAPITAL: Managing Partner 175,328 217,341 Investing Partners (1,061.7 and 1,084.9 units outstanding, respectively) 8,984,322 9,392,555 --------------- ---------------- 9,159,650 9,609,896 --------------- ---------------- $ 14,363,817 $ 9,834,139 =============== =============== 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 2003 of $12,047 per Unit, plus interest to the date of payment, was made to Investing Partners in April 2003, based on a valuation date of December 31, 2002. As a result, the Partnership purchased 23.14 Units in June for a total of $285,936. A second right of presentment offer for 2003 of $9,512 per Unit, plus interest to the date of payment, was made to the Investing Partners on October 24, 2003, based on a valuation date of June 30, 2003. The Investing Partners have until the close of business on November 24, 2003 to present their Units for repurchase by the Partnership. The Partnership will determine by December 15, 2003, 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 2003 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. NEW ACCOUNTING PRONOUCEMENTS Effective January 1, 2003, the Partnership adopted Statement of Financial Accounting Standards (SFAS) No. 143, "Accounting for Asset Retirement Obligations," which resulted in an increase to net oil and gas properties of $1.1 million and additional liabilities related to asset retirement obligations of $.8 million. These entries reflect the asset retirement obligation of the Partnership had the provisions of SFAS No. 143 been applied since inception. This resulted in a cumulative-effect increase in net income of $.3 million. Since January 1, 2003, the asset retirement obligation liability has increased by accretion totaling $27,997. Prior to adoption of this statement, such obligations were accrued ratably over the productive lives of the assets through its depreciation, depletion and amortization for oil and gas properties; therefore, had SFAS No. 143 not been adopted, net income during the third quarter and first nine months of 2003 would not have been materially different. In addition, the net income impact of applying SFAS No. 143 to the comparable periods in 2002 would not have resulted in a material difference. If SFAS No. 143 had been adopted effective January 1, 2002, the liability as of that date would have been approximately $.7 million. 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 $1.9 million during the third quarter of 2003, more than double the net income reported in the third quarter a year ago on the strength of higher prices and production. Net income per Investing Partner Unit increased to $1,321 in the third quarter of 2003 from $490 in the third quarter of 2002. Net income for the first nine months of 2003, including the cumulative effect of a change in accounting principle, totaled $6.2 million or $4,340 per Investing Partner Unit. Net income for the same period in 2002 totaled $2.3 million, or $1,461 per Investing Partner Unit. Current net income before the change in accounting principle was 156 percent over the same period of 2002 on higher oil and gas prices and production. Total revenues for the third quarter increased 76 percent from a year ago, from $1.7 million in 2002 to $3.0 million in 2003. For the nine months ending September 30, 2003, revenues were $9.2 million or almost twice the revenues for the same period in 2002 on higher oil and gas prices and production. 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 2003 2002 (DECREASE) 2003 2002 (DECREASE) ---------- ---------- ---------- ---------- ---------- ------------ Gas volume - Mcf per day 4,125 3,094 33% 3,989 3,313 20% Average gas price - per Mcf $ 5.13 $ 3.26 57% $ 5.83 $ 3.08 89% Oil volume - barrels per day 366 297 23% 336 301 12% Average oil price - per barrel $ 29.43 $ 27.14 8% $ 30.43 $ 24.30 25% THIRD QUARTER 2003 COMPARED TO THIRD QUARTER 2002 Natural gas production revenues for the third quarter of 2003 totaled $1.9 million, up 110 percent from the third quarter of 2002. Natural gas prices for the third quarter of 2003 increased 57 percent compared to the year-earlier period. The $1.87 per Mcf increase in gas prices from a year ago boosted sales by approximately $.5 million. Natural gas volumes on a daily basis increased 33 percent from a year ago as a result of recompletion activities at South Timbalier 295 during 2003 and drilling in the field in 2002. The South Timbalier 295 B-4, B-5 and B-6 wells were brought on production during the second half of 2002. Also, production at North Padre Island 969 was shut-in for nearly all of the first nine months of 2002 for a dispute with a pipeline company on increased fees charged for the transportation of natural gas. The dispute was resolved in the producers' favor in August 2002 with only a slight increase in transportation rates from the field, and production from the North Padre Island Field resumed in late September 2002. The Partnership's crude oil production revenues for the third quarter of 2003 totaled $1.0 million, a 34 percent increase from the third quarter of 2002. Oil production was 23 percent higher than a year ago as recompletions and workovers at South Timbalier 295 during 2003 and drilling in the field during 2002 boosted oil revenues $.2 million. A $2.29 per barrel, or eight percent, increase in the Partnership's average realized oil price increased oil revenues by approximately $.1 million. YEAR-TO-DATE 2003 COMPARED TO YEAR-TO-DATE 2002 Gas sales for the first nine months of 2003 of $6.4 million increased $3.5 million, or 128 percent, when compared to the same period in 2002. The Partnership's average realized gas prices increased $2.75 per Mcf, when compared with the first nine months of 2002, positively impacting sales by $2.5 million. Daily gas production for the first nine months of 2003 also increased 20 percent when compared to the same period in 2002, increasing revenues by $1.0 million. Production increases in 2003 are a result of successful recompletions on South Timbalier 295 during the first nine months of 2003 and a full nine months of production from North Padre 969 during 2003. 5
For the nine months ended September 30, 2003, oil sales increased 40 percent from a year ago to $2.8 million. The Partnership's oil sales revenues were favorably impacted by a 25 percent increase in the average realized oil price and a 12 percent increase in oil production, which increased sales by $.5 million and $.3 million, respectively. The increase in oil production is a result of the successful recompletions and workover at South Timbalier 295 during 2003. 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. The Partnership reported other revenues of $14,567 during the current quarter for the final settlement of business interruption claims related to Hurricane Lili in 2002. OPERATING EXPENSES The Partnership's depreciation, depletion and amortization (DD&A) rate, expressed as a percentage of oil and gas sales, was approximately 26 percent during the third quarter of 2003 compared to 35 percent during the same period in 2002. This decline in rate reflected the impact of higher oil and gas prices in the current year. The Partnership's total DD&A expense increased primarily as a result of higher volumes sold in 2003. The Partnership recognized $9,468 of accretion expense on the asset retirement obligation during the third quarter of 2003 and $27,997 for the first nine months of 2003. Lease operating expense (LOE) in the third quarter of 2003 increased six percent from the third quarter of 2002 as a result of higher overall repair and maintenance costs in 2003 and higher costs at North Padre Island 969 compared to 2002. Operations and costs in the field were sustained at a reduced level in 2002 while shut-in during the dispute between the producers and a pipeline company (as referenced above under the "Third Quarter 2003 Compared to Third Quarter 2002" discussion of natural gas production revenues). During the nine months of 2003, LOE totaled $.6 million, up 27 percent over the same period the year before. The increase is attributable to workover costs incurred on the South Timbalier 295 A-21 well during the first quarter of 2003, higher overall repair and maintenance costs in 2003 and higher costs at North Padre Island 969 compared to 2002. 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 first nine months of 2003 increased from the comparable period in 2002 primarily as a result of increased volumes from South Timbalier 295 and North Padre Island 969, and delivery options utilized for Matagorda Island 681/682. CASH FLOW, LIQUIDITY AND CAPITAL RESOURCES CAPITAL RESOURCES AND LIQUIDITY The Partnership's primary capital resource is net cash provided by operating activities, which totaled $8.0 million for the first nine months of 2003. Net cash provided by operating activities in 2003 was more than twice the $3.5 million reported a year ago, reflecting increases in oil and gas prices and production from 2002. 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 66 percent of the Partnership's production for the nine months of 2003 and 55 percent of total proved reserves at 6
December 31, 2002, 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 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. 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 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, 2003. During the first nine months of 2003, the Partnership's oil and gas property additions totaled $1.7 million as the Partnership participated in nine recompletions at South Timbalier Block 295. The Partnership did not participate in drilling any new wells during the first nine months of 2003. Based on information supplied by the operators of the properties, the Partnership anticipates capital expenditures of approximately $.3 million for the remainder of 2003, primarily for recompletions at South Timbalier Block 295. Such estimates may change based on realized prices, drilling results or changes by the operator to the development plan. On March 5, 2003, the Partnership paid distributions to Investing Partners totaling $.5 million, or $500 per Investing Partner unit. The Partnership did not make a cash distribution to Investing Partners during the first nine months of 2002. The Partnership declared a distribution of $4,000 per Investing Partner unit on September 18, 2003, that was paid to Unitholders on October 9, 2003. 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 2003 of $12,047 per Unit, plus interest to the date of payment, was made to Investing Partners in April 2003, based on a valuation date of December 31, 2002. As a result, the Partnership purchased 23.14 Units in June 2003 for a total of $285,936. A second right of presentment offer for 2003 of $9,512 per Unit, plus interest to the date of payment, was made to the Investing Partners on October 24, 2003, based on a valuation date of June 30, 2003. The Investing Partners have until the close of business on November 24, 2003 to present their Units for repurchase by the Partnership. The Partnership will determine by December 15, 2003, 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 2003 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. Effective July 1, 2003, the Managing Partner acquired from Shell Exploration and Production Company (Shell) interests in certain producing properties in the Gulf of Mexico and two onshore gas plants for $200 million in cash. The purchase price is subject to normal post closing adjustments. Prior to the transaction between Apache and Shell, Morgan Stanley Capital Group, Inc. paid Shell $300 million in cash to acquire an overriding royalty interest in a 7
portion of the reserves to be produced over four years. The impact of these transactions on the Partnership is not known at this time. In conjunction with the Shell transaction, Apache acquired Shell's interest in the Ship Shoal 259 field. As an interest-owner in that field, the Partnership held a preferential right to purchase the acquired interest for $22.7 million. The Partnership waived that right. ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET 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 2002 or the first nine months of 2003. Effective with July 2003 production, the Managing Partner began directly marketing the Partnership's and its own U.S. natural gas production. Most of the Partnership's natural gas production was previously marketed through Cinergy Marketing and Trading, LLC (Cinergy) under a gas sales agreement between the Managing Partner and Cinergy. The Partnership expects that the sales prices it will receive for future natural gas sales will be comparable to prices that would have been received from Cinergy. The information set forth under "Commodity Risk" in Item 7A of the Partnership's Form 10-K for the year ended December 31, 2002, is incorporated by reference. Information about market risks for the current quarter is not materially different. 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 within the last 90 days preceding the date of this report. Based on that review and as of the date of that evaluation, the Partnership's disclosure controls were found to be adequate, providing effective means to insure that the Partnership timely and accurately disclose the information it is required to disclose under applicable laws and regulations. Also, we made no significant changes in the Partnership's internal controls or any other factors that could affect the Partnership's internal controls since our most recent internal controls evaluation. 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 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 13, 2003 /s/ Roger B. Plank --------------------------------------- Roger B. Plank Executive Vice President and Chief Financial Officer Dated: November 13, 2003 /s/ Thomas L. Mitchell --------------------------------------- Thomas L. Mitchell Vice President and Controller (Chief Accounting Officer)
INDEX TO EXHIBITS EXHIBIT NO. DESCRIPTION - ----------- ----------- 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 13, 2003
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 13, 2003
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, 2003, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. ss.78m or ss.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 of Apache Corporation, General Partner 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, 2003, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. ss.78m or ss.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 of Apache Corporation, General Partner