Document and Entity Information
Document and Entity Information | 9 Months Ended |
Sep. 30, 2016shares | |
Document And Entity Information [Abstract] | |
Document Type | 10-Q |
Amendment Flag | false |
Document Period End Date | Sep. 30, 2016 |
Document Fiscal Year Focus | 2,016 |
Document Fiscal Period Focus | Q3 |
Trading Symbol | AOIP |
Entity Registrant Name | APACHE OFFSHORE INVESTMENT PARTNERSHIP |
Entity Central Index Key | 727,538 |
Current Fiscal Year End Date | --12-31 |
Entity Filer Category | Smaller Reporting Company |
Entity Common Stock, Shares Outstanding | 1,022 |
Statement of Consolidated Opera
Statement of Consolidated Operations (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
REVENUES: | ||||
Oil and gas sales | $ 327,784 | $ 427,111 | $ 1,021,124 | $ 1,413,994 |
Other revenue (loss) | 0 | (82,640) | 0 | (82,640) |
Interest income | 2,838 | 4 | 5,143 | 27 |
Total Revenues | 330,622 | 344,475 | 1,026,267 | 1,331,381 |
EXPENSES: | ||||
Depreciation, depletion and amortization | 3,294,416 | 364,315 | ||
Asset retirement obligation accretion | 20,058 | 32,910 | 59,307 | 97,440 |
Lease operating expenses | 131,127 | 192,007 | 447,391 | 613,421 |
Gathering and transportation costs | 3,353 | 33,744 | 81,973 | 102,151 |
Administrative | 87,000 | 92,250 | 261,000 | 276,750 |
Total Expenses | 570,792 | 481,340 | 4,144,087 | 1,454,077 |
Net income (loss) | (240,170) | (136,865) | (3,117,820) | (122,696) |
NET INCOME (LOSS) ALLOCATED TO: | ||||
Managing Partner | 13,507 | (2,281) | 23,162 | 46,256 |
Investing Partners | (253,677) | (134,584) | (3,140,982) | (168,952) |
Net income (loss) | $ (240,170) | $ (136,865) | $ (3,117,820) | $ (122,696) |
NET INCOME (LOSS) PER INVESTING PARTNER UNIT (in USD per share) | $ (248) | $ (132) | $ (3,075) | $ (165) |
WEIGHTED AVERAGE INVESTING PARTNER UNITS OUTSTANDING (in shares) | 1,021.5 | 1,021.5 | 1,021.5 | 1,021.5 |
Recurring | ||||
EXPENSES: | ||||
Depreciation, depletion and amortization | $ 120,227 | $ 130,429 | $ 421,236 | $ 364,315 |
Additional | ||||
EXPENSES: | ||||
Depreciation, depletion and amortization | $ 209,027 | $ 0 | $ 2,873,180 | $ 0 |
Statement of Consolidated Cash
Statement of Consolidated Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income (loss) | $ (3,117,820) | $ (122,696) |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation, depletion and amortization | 3,294,416 | 364,315 |
Asset retirement obligation accretion | 59,307 | 97,440 |
Changes in operating assets and liabilities: | ||
(Increase) decrease in accrued receivables | 32,667 | 68,725 |
Increase (decrease) in receivable from/payable to Apache Corporation | (6,350) | 24,181 |
Increase (decrease) in other payables | (84,249) | 82,640 |
Increase (decrease) in accrued operating expenses | (116,671) | (86,300) |
Increase (decrease) in asset retirement obligations | (290,458) | (209,635) |
Net cash (used in) provided by operating activities | (229,158) | 218,670 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Additions to oil and gas properties | (38,187) | (17,552) |
Net cash used in investing activities | (38,187) | (17,552) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Contributions from Managing Partner | 9,683 | 0 |
Distributions to Managing Partner | 0 | (59,317) |
Net cash provided by (used in) financing activities | 9,683 | (59,317) |
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS | (257,662) | 141,801 |
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR | 5,246,452 | 5,275,503 |
CASH AND CASH EQUIVALENTS, END OF PERIOD | $ 4,988,790 | $ 5,417,304 |
Consolidated Balance Sheet (Una
Consolidated Balance Sheet (Unaudited) - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 4,988,790 | $ 5,246,452 |
Accrued revenues receivable | 115,181 | 147,848 |
Total Current Assets | 5,103,971 | 5,394,300 |
OIL AND GAS PROPERTIES, on the basis of full cost accounting: | ||
Proved properties | 195,075,241 | 195,037,054 |
Less – Accumulated depreciation, depletion and amortization | (190,550,813) | (187,256,397) |
Total oil and gas properties, on the basis of full cost accounting | 4,524,428 | 7,780,657 |
Total Assets | 9,628,399 | 13,174,957 |
CURRENT LIABILITIES: | ||
Payable to Apache Corporation | 8,457 | 14,807 |
Current asset retirement obligation | 524,166 | 524,166 |
Other payables | 0 | 84,249 |
Accrued operating expenses | 112,893 | 229,564 |
Accrued development costs | 12,678 | 303,136 |
Total Current Liabilities | 658,194 | 1,155,922 |
ASSET RETIREMENT OBLIGATION | 1,387,254 | 1,327,947 |
PARTNERS' CAPITAL: | ||
Managing Partner | 439,724 | 406,879 |
Investing Partners (1,021.5 units outstanding) | 7,143,227 | 10,284,209 |
Total Partners' Capital | 7,582,951 | 10,691,088 |
Total liabilities and partners' capital | $ 9,628,399 | $ 13,174,957 |
Consolidated Balance Sheet (Un5
Consolidated Balance Sheet (Unaudited) (Parenthetical) - shares | Sep. 30, 2016 | Dec. 31, 2015 |
Statement of Financial Position [Abstract] | ||
Investing Partners, units outstanding | 1,021.5 | 1,021.5 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2016 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES As of September 30, 2016 , 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, 2015 . 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, 2015 . 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 recorded non-cash write-downs of the carrying value of its proved oil and gas properties totaling $209,027 during the third quarter of 2016 and $2,873,180 during the first nine months of 2016 . New Pronouncements Issued But Not Yet Adopted In August 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (“ASU”) 2016-15, Statement of Cash Flows (Topic 230). ASU 2016-15 seeks to reduce the existing diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. This update is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years, with early adoption permitted. The Partnership is currently evaluating the provisions of ASU 2016-15 and assessing the impact, if any, it may have on its statement of consolidated cash flows. In June 2016, the FASB issued ASU 2016-13, "Financial Instruments - Credit Losses." The standard changes the impairment model for most financial assets and certain other instruments, including trade and other receivables, held-to-maturity debt securities and loans, and requires entities to use a new forward-looking expected loss model that will result in the earlier recognition of allowance for losses. This update is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted for a fiscal year beginning after December 15, 2018, including interim periods within that fiscal year. The Partnership does not expect to adopt the guidance early. Entities will apply the standard's provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is adopted. The Partnership is evaluating the new guidance and does not believe this standard will have a material impact on its consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, a new lease standard requiring lessees to recognize lease assets and lease liabilities for most leases classified as operating leases under previous U.S. GAAP. The guidance is effective for fiscal years beginning after December 15, 2018 with early adoption permitted. The Partnership will be required to use a modified retrospective approach for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements. The Partnership is currently evaluating the impact of adopting this standard on its consolidated financial statements. In May 2014, the FASB and the International Accounting Standards Board (IASB) issued a joint revenue recognition standard, ASU 2014-09. The new standard removes inconsistencies in existing standards, changes the way companies recognize revenue from contracts with customers, and increases disclosure requirements. The guidance requires companies to recognize revenue to depict the transfer of goods or services to customers in amounts that reflect the consideration to which the company expects to be entitled in exchange for those goods or services. In March 2016, the FASB issued ASU 2016-08, which provides further clarification on the principal versus agent evaluation. The guidance is effective for the annual and interim periods beginning after December 31, 2017. The standard is required to be adopted using either the full retrospective approach, with all prior periods presented adjusted, or the modified retrospective approach, with a cumulative adjustment to retained earnings on the opening balance sheet. The Partnership is currently evaluating the level of effort needed to implement the standard, the impact of adopting this standard on its consolidated financial statements, and whether to use the full retrospective approach or the modified retrospective approach. |
Receivable from _ Payable to Ap
Receivable from / Payable to Apache Corporation | 9 Months Ended |
Sep. 30, 2016 | |
Related Party Transactions [Abstract] | |
Receivable from / Payable to Apache Corporation | RECEIVABLE FROM / PAYABLE TO APACHE CORPORATION The 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. |
Right of Presentment
Right of Presentment | 9 Months Ended |
Sep. 30, 2016 | |
Equity [Abstract] | |
Right of Presentment | 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 2016 . The per-unit value was determined to be $ 6,057 based on the valuation date of December 31, 2015 . A second right of presentment valuation was computed during October 2016 and the per-unit value was determined to be $ 6,091 based on a valuation date of June 30, 2016. The Partnership did not repurchase any Investing Partner Units (Units) during the first nine months of 2016 , and is not expected to purchase any Units in the fourth quarter of 2016. The per-unit right of presentment value computed during the first quarter of 2015 was determined to be $ 9,765 based on the valuation date of December 31, 2014 , and the second per-unit right of presentment in 2015 was $ 9,831 based on a valuation date of June 30, 2015. The Partnership did not repurchase any Units during the first nine months of 2015 . Pursuant to the Amended Partnership Agreement, the Partnership has no obligation to purchase any Units presented to the extent it determines that it has insufficient funds for such purchases. |
Asset Retirement Obligations
Asset Retirement Obligations | 9 Months Ended |
Sep. 30, 2016 | |
Asset Retirement Obligation Disclosure [Abstract] | |
Asset Retirement Obligations | ASSET RETIREMENT OBLIGATIONS The following table describes the changes to the Partnership’s asset retirement obligation liability for the first nine months of 2016 : Asset retirement obligation at December 31, 2015 $ 1,852,113 Accretion expense 59,307 Asset retirement obligation at September 30, 2016 1,911,420 Less current portion (524,166 ) Asset retirement obligation, long-term $ 1,387,254 |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2016 | |
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 September 30, 2016 , and December 31, 2015 , 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 nine months ended September 30, 2016 , and 2015 . |
Summary of Significant Accoun11
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2016 | |
Accounting Policies [Abstract] | |
Use of Estimates | 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 | 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, 2015 . 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. |
New Pronouncements Issued But Not Yet Adopted | New Pronouncements Issued But Not Yet Adopted In August 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (“ASU”) 2016-15, Statement of Cash Flows (Topic 230). ASU 2016-15 seeks to reduce the existing diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. This update is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years, with early adoption permitted. The Partnership is currently evaluating the provisions of ASU 2016-15 and assessing the impact, if any, it may have on its statement of consolidated cash flows. In June 2016, the FASB issued ASU 2016-13, "Financial Instruments - Credit Losses." The standard changes the impairment model for most financial assets and certain other instruments, including trade and other receivables, held-to-maturity debt securities and loans, and requires entities to use a new forward-looking expected loss model that will result in the earlier recognition of allowance for losses. This update is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted for a fiscal year beginning after December 15, 2018, including interim periods within that fiscal year. The Partnership does not expect to adopt the guidance early. Entities will apply the standard's provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is adopted. The Partnership is evaluating the new guidance and does not believe this standard will have a material impact on its consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, a new lease standard requiring lessees to recognize lease assets and lease liabilities for most leases classified as operating leases under previous U.S. GAAP. The guidance is effective for fiscal years beginning after December 15, 2018 with early adoption permitted. The Partnership will be required to use a modified retrospective approach for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements. The Partnership is currently evaluating the impact of adopting this standard on its consolidated financial statements. In May 2014, the FASB and the International Accounting Standards Board (IASB) issued a joint revenue recognition standard, ASU 2014-09. The new standard removes inconsistencies in existing standards, changes the way companies recognize revenue from contracts with customers, and increases disclosure requirements. The guidance requires companies to recognize revenue to depict the transfer of goods or services to customers in amounts that reflect the consideration to which the company expects to be entitled in exchange for those goods or services. In March 2016, the FASB issued ASU 2016-08, which provides further clarification on the principal versus agent evaluation. The guidance is effective for the annual and interim periods beginning after December 31, 2017. The standard is required to be adopted using either the full retrospective approach, with all prior periods presented adjusted, or the modified retrospective approach, with a cumulative adjustment to retained earnings on the opening balance sheet. The Partnership is currently evaluating the level of effort needed to implement the standard, the impact of adopting this standard on its consolidated financial statements, and whether to use the full retrospective approach or the modified retrospective approach. |
Asset Retirement Obligations (T
Asset Retirement Obligations (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
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 nine months of 2016 : Asset retirement obligation at December 31, 2015 $ 1,852,113 Accretion expense 59,307 Asset retirement obligation at September 30, 2016 1,911,420 Less current portion (524,166 ) Asset retirement obligation, long-term $ 1,387,254 |
Summary of Significant Accoun13
Summary of Significant Accounting Policies (Details) - USD ($) | 3 Months Ended | 9 Months Ended |
Sep. 30, 2016 | Sep. 30, 2016 | |
Accounting Policies [Abstract] | ||
Impairment of oil and gas properties | $ 209,027 | $ 2,873,180 |
Right of Presentment - Addition
Right of Presentment - Additional Information (Detail) - USD ($) | Jun. 30, 2016 | Dec. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 |
Equity [Abstract] | ||||
Investing partner units value per unit | $ 6,091 | $ 6,057 | $ 9,831 | $ 9,765 |
Asset Retirement Obligations -
Asset Retirement Obligations - Changes to Partnership's Asset Retirement Obligation Liability (Detail) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | |
Asset Retirement Obligation, Roll Forward Analysis [Roll Forward] | |||||
Asset retirement obligation, beginning balance | $ 1,852,113 | ||||
Accretion expense | $ 20,058 | $ 32,910 | 59,307 | $ 97,440 | |
Asset retirement obligation, ending balance | 1,911,420 | 1,911,420 | |||
Less current portion | (524,166) | (524,166) | $ (524,166) | ||
Asset retirement obligation, long-term | $ 1,387,254 | $ 1,387,254 | $ 1,327,947 |