Cover
Cover | 12 Months Ended |
Dec. 31, 2019USD ($)shares | |
Cover page. | |
Document Type | 10-K |
Document Annual Report | true |
Document Period End Date | Dec. 31, 2019 |
Document Transition Report | false |
Entity File Number | 0-13546 |
Entity Registrant Name | APACHE OFFSHORE INVESTMENT PARTNERSHIP |
Entity Incorporation, State or Country Code | DE |
Entity Tax Identification Number | 41-1464066 |
Entity Address, Address Line One | One Post Oak Central, 2000 Post Oak Boulevard, Suite 100, |
Entity Address, City or Town | Houston, |
Entity Address, State or Province | TX |
Entity Address, Postal Zip Code | 77056-4400 |
City Area Code | 713 |
Local Phone Number | 296-6000 |
Title of 12(g) Security | Partnership Units |
Entity Well-known Seasoned Issuer | No |
Entity Voluntary Filers | No |
Entity Current Reporting Status | Yes |
Entity Interactive Data Current | Yes |
Entity Filer Category | Non-accelerated Filer |
Entity Small Business | true |
Entity Emerging Growth Company | false |
Entity Shell Company | false |
Entity Common Stock, Shares Outstanding | shares | 1,022 |
Entity Public Float | $ | $ 0 |
Documents Incorporated by Reference | Portions of Apache Corporation’s proxy statement relating to its 2020 annual meeting of stockholders have been incorporated by reference into Part III hereof. |
Amendment Flag | false |
Document Fiscal Year Focus | 2019 |
Document Fiscal Period Focus | FY |
Entity Central Index Key | 0000727538 |
Current Fiscal Year End Date | --12-31 |
STATEMENT OF CONSOLIDATED OPERA
STATEMENT OF CONSOLIDATED OPERATIONS - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
REVENUES: | |||
Oil and gas sales | $ 1,100,334 | $ 1,416,934 | $ 976,395 |
Interest income | 106,787 | 81,368 | 32,104 |
Total Revenues | 1,207,121 | 1,498,302 | 1,008,499 |
EXPENSES: | |||
Depreciation, depletion and amortization | 264,031 | 297,328 | 261,228 |
Asset retirement obligation accretion | 77,805 | 96,832 | 105,135 |
Lease operating expenses | 530,206 | 492,713 | 581,718 |
Gathering and transportation costs | 15,823 | 17,493 | 2,495 |
Administrative | 328,536 | 323,200 | 315,392 |
Total Expenses | 1,216,401 | 1,227,566 | 1,265,968 |
NET INCOME (LOSS) | (9,280) | 270,736 | (257,469) |
NET INCOME (LOSS) ALLOCATED TO: | |||
Managing Partner | 30,385 | 96,704 | (5,899) |
Investing Partners | (39,665) | 174,032 | (251,570) |
NET INCOME (LOSS) | $ (9,280) | $ 270,736 | $ (257,469) |
NET INCOME (LOSS) PER INVESTING PARTNER UNIT (in USD per share) | $ (39) | $ 170 | $ (246) |
WEIGHTED AVERAGE INVESTING PARTNER UNITS OUTSTANDING (in shares) | 1,021.5 | 1,021.5 | 1,021.5 |
STATEMENT OF CONSOLIDATED CASH
STATEMENT OF CONSOLIDATED CASH FLOWS - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net income (loss) | $ (9,280) | $ 270,736 | $ (257,469) |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | |||
Depreciation, depletion and amortization | 264,031 | 297,328 | 261,228 |
Asset retirement obligation accretion | 77,805 | 96,832 | 105,135 |
Changes in operating assets and liabilities: | |||
Accrued revenues receivable | 11,423 | (27,235) | 30,211 |
Receivable from/payable to Apache Corporation | 6,517 | (2,329) | 8,200 |
Accrued operating expenses | (14,414) | (9,441) | 3,641 |
Asset retirement expenditures | (397,542) | (429,502) | (12,259) |
Net cash provided by (used in) operating activities | (61,460) | 196,389 | 138,687 |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Additions to oil and gas properties | (18,481) | (158,444) | (36,115) |
Net cash used in investing activities | (18,481) | (158,444) | (36,115) |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Contributions from Managing Partner | 0 | 0 | 0 |
Distributions to Managing Partner | (2,963) | (52,094) | (20,755) |
Net cash provided by (used in) financing activities | (2,963) | (52,094) | (20,755) |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | (82,904) | (14,149) | 81,817 |
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR | 5,103,336 | 5,117,485 | 5,035,668 |
CASH AND CASH EQUIVALENTS, END OF PERIOD | $ 5,020,432 | $ 5,103,336 | $ 5,117,485 |
CONSOLIDATED BALANCE SHEET
CONSOLIDATED BALANCE SHEET - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 5,020,432 | $ 5,103,336 |
Accrued revenues receivable | 108,693 | 120,116 |
Total Current Assets | 5,129,125 | 5,223,452 |
OIL AND GAS PROPERTIES, on the basis of full cost accounting: | ||
Proved properties | 195,401,395 | 195,327,296 |
Less – Accumulated depreciation, depletion and amortization | (191,459,215) | (191,195,184) |
Total oil and gas properties, on the basis of full cost accounting | 3,942,180 | 4,132,112 |
Total Assets | 9,071,305 | 9,355,564 |
CURRENT LIABILITIES: | ||
Payable to Apache Corporation | 7,589 | 1,072 |
Current asset retirement obligation | 614,493 | 390,000 |
Accrued operating expenses | 77,000 | 91,414 |
Accrued development costs | 76,410 | 125,999 |
Total Current Liabilities | 775,492 | 608,485 |
ASSET RETIREMENT OBLIGATION | 806,789 | 1,245,812 |
PARTNERS’ CAPITAL: | ||
Managing Partner | 491,608 | 464,186 |
Investing Partners (1,021.5 units outstanding) | 6,997,416 | 7,037,081 |
Total Partners' Capital | 7,489,024 | 7,501,267 |
Total liabilities and partners' capital | $ 9,071,305 | $ 9,355,564 |
CONSOLIDATED BALANCE SHEET (Par
CONSOLIDATED BALANCE SHEET (Parenthetical) - shares | Dec. 31, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Investing partners, units outstanding (in shares) | 1,021.5 | 1,021.5 |
STATEMENT OF CONSOLIDATED CHANG
STATEMENT OF CONSOLIDATED CHANGES IN PARTNERS' CAPITAL - USD ($) | Total | Managing Partner | Investing Partners |
BEGINNING BALANCE at Dec. 31, 2016 | $ 7,560,849 | $ 446,230 | $ 7,114,619 |
Distributions | (20,755) | (20,755) | |
Net income (loss) | (257,469) | (5,899) | (251,570) |
ENDING BALANCE at Dec. 31, 2017 | 7,282,625 | 419,576 | 6,863,049 |
Distributions | (52,094) | (52,094) | |
Net income (loss) | 270,736 | 96,704 | 174,032 |
ENDING BALANCE at Dec. 31, 2018 | 7,501,267 | 464,186 | 7,037,081 |
Distributions | (2,963) | (2,963) | |
Net income (loss) | (9,280) | 30,385 | (39,665) |
ENDING BALANCE at Dec. 31, 2019 | $ 7,489,024 | $ 491,608 | $ 6,997,416 |
ORGANIZATION
ORGANIZATION | 12 Months Ended |
Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION | ORGANIZATION Nature of Operations Apache Offshore Investment Partnership, a Delaware general partnership (the Investment Partnership), was formed on October 31, 1983, consisting of Apache Corporation (Apache or 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 primary business of the Operating Partnership is to conduct oil and gas development and production operations. The Operating Partnership conducts the operations of the Investment Partnership. The accompanying financial statements include the accounts of both the Investment Partnership and Operating Partnership. The Investing Partners purchased Units of Partnership Interests (Units) in the Investment Partnership at $150,000 per Unit, with five percent down and the balance in payments as called by the Investment Partnership. In 1989, the Investment Partnership determined that the full $150,000 per Unit was not needed, fixed the total calls at $85,000 per Unit, and released the Investing Partners from liability for future calls. The Investment Partnership invested, and will continue to invest, its entire capital in the Operating Partnership. Apache is the general partner of both the Investment and Operating partnerships, and held approximately five percent of the 1,021.5 Units outstanding at December 31, 2019 . As used hereafter, the term “Partnership” refers to the Investment Partnership or the Operating Partnership, as the case may be. Except for an additional interest acquired in Matagorda Island Block 681 and 682 in 1992, the Partnership acquired its oil and gas interests through the purchase of an 85 percent interest in offshore properties acquired by Apache as a co-venturer in a series of oil and gas exploration, development and production activities on 87 federal lease tracts in the Gulf of Mexico, offshore Louisiana and Texas. The remaining 15 percent interest was purchased by an affiliated partnership or retained by Apache. As of December 31, 2019, the Partnership has only one active venture prospect at South Timbalier 295, located offshore Louisiana, with a 7.08 percent working interest. The Partnership’s future financial condition and results of operations will depend largely upon prices received for its oil and natural gas production and the costs of developing and producing reserves. 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. Under the terms of the Partnership Agreement of the Investment Partnership (the Partnership Agreement), the Investing Partners receive 80 percent and Apache receives 20 percent of revenue. Lease operating, gathering and transportation, and administrative expenses are allocated to the Investing Partners and Apache in the same proportion as revenues. The Investing Partners receive 100 percent of the interest income earned on short-term cash investments. The Investing Partners generally pay for 90 percent and Apache generally pays for 10 percent of exploration and development costs and expenses incurred by the Partnership. However, intangible drilling costs, interest costs and fees or expenses related to the loans incurred by the Partnership are allocated 99 percent to the Investing Partners and one percent to Apache until such time as the amount so allocated to the Investing Partners equals 90 percent of the total amount of such costs, including such costs incurred by Apache prior to the formation of the Partnership. Notice of Withdrawal On March 22, 2019, Apache, as the Managing Partner of the Investment Partnership, gave notice of its intention to withdraw as Managing Partner of the Investment Partnership. The notice described the withdrawal process and certain notice periods required by that process. No party assumed the role of Managing Partner within the 120 -day notice period specified by the notice of intention to withdraw. Consequently, Apache will oversee the process of winding up and liquidating the business and affairs of the Investment Partnership. Apache has not made a decision as to when it will complete the process to withdraw as Managing Partner. Right of Presentment In February 1994, an amendment to the Partnership Agreement created a right of presentment under which all Investing Partners have a limited and voluntary right to offer their Units to the Partnership twice each year to be purchased for cash. The Partnership did not offer to purchase any Units from Investing Partners in 2018 , or 2017 as a result of the limited amount of cash available for discretionary purposes. On April 26, 2019, the Managing Partner determined that, during the withdrawal and dissolution process noted above, 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. As a result of this determination by the Managing Partner, pursuant to Section 6.12 of the Partnership Agreement, the right of presentment was terminated for 2019 and future periods. 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. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Accounting policies used by the Partnership reflect industry practices and conform to accounting principles generally accepted in the United States (GAAP). Significant policies are discussed below. Statement Presentation The accompanying consolidated financial statements include the accounts of Apache Offshore Investment Partnership and Apache Offshore Petroleum Limited Partnership after elimination of intercompany balances and transactions. Use of Estimates The preparation of financial statements in conformity with GAAP and the disclosure of contingent assets and liabilities requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Partnership bases its estimates on historical experience and various other assumptions that are believed to be reasonable under the circumstances. The Partnership evaluates its estimates and assumptions on a regular basis. Actual results may differ from these estimates and assumptions used in preparation of its financial statements and changes in these estimates are recorded when known. 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 (see Note 10—Supplemental Oil and Gas Disclosures (Unaudited)) and the assessment of asset retirement obligations (see Note 8—Asset Retirement Obligation). Cash Equivalents The Partnership considers all highly liquid short-term investments with an original maturity of three months or less at the time of purchase to be cash equivalents. These investments are carried at cost, which approximates fair value. As of December 31, 2019 and 2018 , the Partnership had $5.0 million and $5.1 million , respectively, of cash and cash equivalents. Oil and Gas Properties The Partnership follows the full-cost method of accounting for its investment in oil and gas properties for financial statement purposes. Under this method of accounting, the Partnership capitalizes all acquisition, exploration and development costs incurred for the purpose of finding oil and gas reserves. The amounts capitalized under this method include dry hole costs, leasehold costs, engineering, geological, exploration, development and other similar costs. All costs related to production and administrative functions are expensed in the period incurred. The Partnership includes the present value of its dismantlement, restoration, and abandonment costs within the capitalized oil and gas property balance as described in Note 8—Asset Retirement Obligation. Unless greater than 25 percent of the Partnership’s reserve volumes are sold, proceeds from the sale of oil and gas properties are accounted for as reductions to capitalized costs, and gains or losses are not recognized. Capitalized costs of oil and gas properties are amortized on the future gross revenue method whereby depreciation, depletion and amortization (DD&A) expense is computed quarterly by dividing current period oil and gas sales by estimated future gross revenue from proved oil and gas reserves (including current period oil and gas sales) and applying the resulting rate to the net cost of evaluated oil and gas properties, including estimated future development costs. Under the full-cost method of accounting, the Partnership limits the capitalized costs of proved oil and gas properties, net of accumulated DD&A, to the estimated future net cash flows from proved oil and gas reserves discounted at 10 percent , plus the lower of cost or fair value of unproved properties included in the costs being amortized, if any. This ceiling test is performed each quarter. If capitalized costs exceed this limit, the excess is charged to expense and reflected as additional DD&A in the accompanying statement of consolidated operations. 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. The Partnership did no t record any write-downs of capitalized costs during 2019, 2018, or 2017. See Note 10—Supplemental Oil and Gas Disclosures (Unaudited) for a discussion on the calculation of estimated future net cash flows. Asset Retirement Costs and Obligation The initial estimated asset retirement obligation related to property and equipment is recorded as a liability at its fair value, with an offsetting asset retirement cost recorded as an increase to oil and gas properties on the consolidated balance sheet. If the fair value of the recorded asset retirement obligation changes, a revision is recorded to both the asset retirement obligation and the asset retirement cost. Revisions in estimated liabilities can result from changes in estimated inflation rates, changes in service and equipment costs and changes in the estimated timing of settling asset retirement obligations. Accretion expense on the liability is recognized over the estimated productive life of the related assets. Revenue Recognition The Partnership applies the provisions of Accounting Standards Codification 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. 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 production. 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 December 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 totaled $108,693 and $120,116 as of December 31, 2019 and 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 years ended December 31, 2019, 2018 and 2017: For the Year Ended December 31, 2019 2018 2017 Oil $ 990,659 $ 1,253,490 $ 806,620 Gas 94,057 120,763 145,562 NGLs 15,618 42,681 24,213 Total Oil and Gas Revenue $ 1,100,334 $ 1,416,934 $ 976,395 The Partnership did not have any revenue from non-customers. Insurance Coverage The Partnership recognizes an insurance receivable when collection of the receivable is deemed probable. Any recognition of an insurance receivable is recorded by crediting and offsetting the original charge. Any differential arising between insurance recoveries and insurance receivables is recorded as a capitalized cost or as an expense, consistent with its original treatment. Net Income (Loss) Per Investing Unit The net income (loss) per Investing Partner Unit is calculated by dividing the aggregate Investing Partners’ net income for the period by the number of weighted average Investing Partner Units outstanding for that period. Income Taxes The profit or loss of the Partnership for federal income tax reporting purposes is included in the income tax returns of the partners. Accordingly, no recognition has been given to income taxes in the accompanying financial statements. Receivable from/Payable to Apache Corporation The receivable from/payable to Apache Corporation, the Partnership’s 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. Maintenance and Repairs Maintenance and repairs are charged to expense as incurred. Recently Adopted Accounting Pronouncements |
COMPENSATION TO AFFILIATES
COMPENSATION TO AFFILIATES | 12 Months Ended |
Dec. 31, 2019 | |
Text Block [Abstract] | |
COMPENSATION TO AFFILIATES | COMPENSATION TO AFFILIATES Apache is entitled to the following types of compensation and reimbursement for costs and expenses. Total Reimbursed by the Investing Partners for the Year Ended December 31, 2019 2018 2017 (In thousands) a. Apache is reimbursed for general, administrative and overhead expenses incurred in connection with the management and operation of the Partnership’s business $ 263 $ 259 $ 252 b. Apache is reimbursed for development overhead costs incurred in the Partnership’s operations. These costs are based on development activities and are capitalized to oil and gas properties $ — $ — $ — Apache operated certain Partnership properties through September 30, 2013, at which time Fieldwood Energy LLC purchased Apache’s interest in South Timbalier 295 and Ship Shoal 258/259 and became operator of these properties. Billings to the Partnership were made on the same basis as to unaffiliated third parties or at prevailing industry rates. |
OIL AND GAS PROPERTIES
OIL AND GAS PROPERTIES | 12 Months Ended |
Dec. 31, 2019 | |
Extractive Industries [Abstract] | |
OIL AND GAS PROPERTIES | OIL AND GAS PROPERTIES The following tables contain direct cost information and changes in the Partnership’s oil and gas properties for each of the years referenced. All costs of oil and gas properties are currently being amortized. 2019 2018 2017 (In thousands) Oil and Gas Properties Balance, beginning of year $ 195,327 $ 195,005 $ 194,893 Costs incurred during the year: Development – Investing Partners 67 291 104 Managing Partner 7 31 8 Balance, end of year $ 195,401 $ 195,327 $ 195,005 Development costs for 2019 and 2018 included upward revisions of approximately $56 thousand and $305 thousand , respectively, for estimated abandonment costs primarily related to revised cost estimates on its Ship Shoal 258/259 properties. Development costs for 2017 include negative revision of approximately $66 thousand for estimated abandonment costs and the deferral of final platform decommissioning at North Padre Island 969/976. Approximately $18 thousand , $17 thousand , and $178 thousand of capital costs were incurred in 2019, 2018, and 2017, respectively, for participation in pipeline and recompletion projects at South Timbalier 295. Managing Partner Investing Partners Total (In thousands) Accumulated Depreciation, Depletion and Amortization Balance, December 31, 2016 $ 21,091 $ 169,546 $ 190,637 Provision 13 248 261 Balance, December 31, 2017 $ 21,104 $ 169,794 $ 190,898 Provision 16 281 297 Balance, December 31, 2018 $ 21,120 $ 170,075 $ 191,195 Provision 14 250 264 Balance, December 31, 2019 $ 21,134 $ 170,325 $ 191,459 The Partnership’s aggregate DD&A expense as a percentage of oil and gas sales for 2019 , 2018 , and 2017 was 24 percent , 21 percent and 27 percent , respectively. |
MAJOR CUSTOMER AND RELATED PART
MAJOR CUSTOMER AND RELATED PARTIES INFORMATION | 12 Months Ended |
Dec. 31, 2019 | |
Risks and Uncertainties [Abstract] | |
MAJOR CUSTOMER AND RELATED PARTIES INFORMATION | MAJOR CUSTOMER AND RELATED PARTIES INFORMATION Revenues received from major third-party customers that equaled ten percent or more of oil and gas sales are discussed below. No other third-party customers individually accounted for ten percent or more of oil and gas sales. Remittances from Fieldwood Energy LLC accounted for 10 percent , 12 percent and 18 percent of the Partnership’s oil and gas sales for the years 2019 , 2018 and 2017 , respectively. Approximately 90 percent , 88 percent and 82 percent of the Partnership’s oil and gas sales in 2019 , 2018 and 2017 , respectively, were to Chevron Products Company. The Partnership’s revenues are derived principally from uncollateralized sales to customers in the oil and gas industry; therefore, customers may be similarly affected by changes in economic and other conditions within the industry. The Partnership has not experienced material credit losses on such sales. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 12 Months Ended |
Dec. 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 December 31, 2019 and December 31, 2018 , the carrying amounts of cash, cash equivalents, accounts receivable, and accounts payable were determined to approximate fair value because of the short-term nature or maturity of these instruments. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Litigation – The Partnership is subject to governmental and regulatory controls arising in the ordinary course of business. It is the opinion of Apache’s management that all claims and litigation involving the Partnership are not likely to have a material adverse effect on its financial position or results of operations. Environmental – The Partnership, as an owner or lessee of interests in oil and gas properties, is subject to various federal, state and local laws and regulations relating to discharge of materials into, and protection of, the environment. These laws and regulations may, among other things, impose liability on the lessee under an oil and gas lease for the cost of pollution clean-up resulting from operations and subject the lessee to liability for pollution damages. Apache maintains insurance coverage on the Partnership’s properties, which it believes is customary in the industry, although the Partnership is not fully insured against all environmental risks. With respect to oil and gas operations in the Gulf of Mexico, the BOEM has issued Notice to Lessees (NTL) No. 2016-N01 pertaining to the obligations of companies to provide supplemental assurances for performance with respect to plugging, abandonment, decommissioning, and site clearance obligations associated with wells, platforms, structures, and facilities located upon or used in connection with such companies’ oil and gas leases. Under this NTL, implementation of which is currently suspended and which may be revised by the BOEM, the Partnership may be required to provide additional security to BOEM with respect to plugging, abandonment, and decommissioning obligations relating to the Partnership’s current ownership interests in various Gulf of Mexico leases. The Partnership will likely satisfy such requirements through the provision of bonds or other forms of security. |
ASSET RETIREMENT OBLIGATION
ASSET RETIREMENT OBLIGATION | 12 Months Ended |
Dec. 31, 2019 | |
Asset Retirement Obligation Disclosure [Abstract] | |
ASSET RETIREMENT OBLIGATION | ASSET RETIREMENT OBLIGATION The following table describes the changes to the Partnership’s asset retirement obligation (ARO) liability for the years ended December 31, 2019 and 2018 : 2019 2018 Asset retirement obligation at beginning of year $ 1,635,812 $ 1,789,267 Accretion expense 77,805 96,832 Liabilities settled (347,952 ) (555,500 ) Revisions in estimated liabilities 55,617 305,213 Asset retirement obligation at end of year $ 1,421,282 $ 1,635,812 Less current portion (614,493 ) (390,000 ) Asset retirement obligation, long-term $ 806,789 $ 1,245,812 The ARO liability reflects the estimated present value of the amount of dismantlement, removal, site reclamation, and similar activities associated with the Partnership’s oil and gas properties. The Partnership utilizes estimates from property operators and current market costs to estimate the expected cash outflows for retirement obligations. The Partnership estimates the ultimate productive life of the properties, a risk-adjusted discount rate, and an inflation factor in order to determine the current present value of this obligation. To the extent future revisions to these assumptions impact the present value of the existing ARO liability, a corresponding adjustment is made to the oil and gas property balance. Liabilities settled primarily relate to individual wells plugged and abandoned and platform decommissioning during the periods presented. The current portion of the ARO liability represents the retirement obligation expected to be incurred in the next twelve months. Decommissioning and abandonment activities began at Ship Shoal 258/259 upon cessation of the lease in 2018 and are expected to be completed during 2020. The lease was relinquished earlier than previously estimated given unplanned third-party pipeline issues and the decision that returning the lease to production was uneconomic. The operator also experienced challenges related to the plugging of wells which resulted in revising the field’s estimated abandonment obligation based on projected costs. Both factors contributed to the upward cost revisions to previous ARO liability estimates. |
TAX-BASIS FINANCIAL INFORMATION
TAX-BASIS FINANCIAL INFORMATION | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
TAX-BASIS FINANCIAL INFORMATION | TAX-BASIS FINANCIAL INFORMATION A reconciliation of ordinary income for federal income tax reporting purposes to net income under accounting principles generally accepted in the United States is as follows: 2019 2018 2017 Net partnership ordinary income (loss) for federal income tax reporting purposes $ (80,046 ) $ (196,919 ) $ 5,948 Plus: Items of current expense for tax reporting purposes only – Intangible drilling cost 113 16,859 33,479 Dismantlement and abandonment cost 347,952 555,501 2,849 Tax depreciation 64,537 289,455 66,618 412,602 861,815 102,946 Less: full cost DD&A expense (264,031 ) (297,328 ) (261,228 ) Less: asset retirement obligation accretion (77,805 ) (96,832 ) (105,135 ) Net income (loss) $ (9,280 ) $ 270,736 $ (257,469 ) The Partnership’s tax basis in net oil and gas properties at December 31, 2019 , and 2018 was $2,505,692 and $2,649,454 , respectively, lower than the carrying value of oil and gas properties under full cost accounting. The difference reflects the timing deductions for depreciation, depletion and amortization, intangible drilling costs and dismantlement and abandonment costs. For federal income tax reporting, the Partnership had capitalized syndication cost of $8,660,878 at December 31, 2019 , and 2018 . A reconciliation of liabilities for federal income tax reporting purposes to liabilities under accounting principles generally accepted in the United States is as follows: December 31, 2019 2018 Liabilities for federal income tax purposes $ 160,999 $ 218,485 Asset retirement liability 1,421,282 1,635,812 Liabilities under accounting principles generally accepted in the United States $ 1,582,281 $ 1,854,297 Asset retirement liabilities for future dismantlement and abandonment costs are not recognized for federal income tax reporting purposes until settled. |
SUPPLEMENTAL OIL AND GAS DISCLO
SUPPLEMENTAL OIL AND GAS DISCLOSURES (Unaudited) | 12 Months Ended |
Dec. 31, 2019 | |
Extractive Industries [Abstract] | |
SUPPLEMENTAL OIL AND GAS DISCLOSURES (Unaudited) | SUPPLEMENTAL OIL AND GAS DISCLOSURES (Unaudited) Oil and Gas Reserve Information Proved oil and gas reserves are the estimated quantities of natural gas, crude oil, condensate, and NGLs that geological and engineering data demonstrate with reasonable certainty to be recoverable in future years from known reservoirs under existing conditions, operating conditions, and government regulations. There are numerous uncertainties inherent in estimating quantities of proved reserves and projecting future rates of production and timing of development expenditures. The following reserve data represents estimates only and should not be construed as being exact. (Oil and NGL in Mbbls and gas in MMcf) 2019 2018 2017 Oil NGL Gas Oil NGL Gas Oil NGL Gas Proved Reserves Beginning of year 363 29 670 376 54 1,016 365 53 985 Extensions, discoveries and other additions — — — — — — — — — Revisions of previous estimates 15 (1 ) (10 ) 6 (24 ) (309 ) 28 2 73 Production (17 ) (1 ) (34 ) (19 ) (1 ) (37 ) (17 ) (1 ) (42 ) End of year 361 27 626 363 29 670 376 54 1,016 Proved Developed Beginning of year 363 29 670 376 54 1,016 365 53 985 End of year 361 27 626 363 29 670 376 54 1,016 Oil includes crude oil and condensate. All the Partnership’s reserves as of December 31, 2019 are located on federal lease tracts in the Gulf of Mexico, offshore Louisiana. Approximately 89 percent of the Partnership’s current proved developed reserves on a barrels of oil equivalent basis are classified as proved not producing. These reserves relate to zones that are either behind pipe, or that have been completed but not yet produced or zones that have been produced in the past, but are now not producing due to mechanical reasons. These reserves may be regarded as less certain than producing reserves because they are frequently based on volumetric calculations rather than performance data. Future production associated with behind pipe reserves is scheduled to follow depletion of the currently producing zones in the same wellbores. It should be noted that additional capital will have to be spent to access these reserves. The capital and economic impact of production timing is reflected in the Partnership’s standardized measure under Future Net Cash Flows. Future Net Cash Flows Future cash inflows as of December 31, 2019 , 2018 , and 2017 were calculated using an unweighted arithmetic average of oil and gas prices in effect on the first day of each month in the respective year, except where prices are defined by contractual arrangements. Operating costs, production and ad valorem taxes and future development costs are based on current costs with no escalation. The following table sets forth unaudited information concerning future net cash flows from proved oil and gas reserves. As the Partnership pays no income taxes, estimated future income tax expenses are omitted. This information does not purport to present the fair value of the Partnership’s oil and gas assets, but does present a standardized disclosure concerning possible future net cash flows that would result under the assumptions used. Discounted Future Net Cash Flows Relating to Proved Reserves December 31, 2019 2018 2017 (In thousands) Future cash inflows $ 24,158 $ 28,707 $ 25,968 Future production costs (5,540 ) (5,937 ) (7,808 ) Future development costs (1) (3,483 ) (3,831 ) (3,957 ) Net cash flows 15,135 18,939 14,203 10 percent annual discount rate (4,735 ) (7,316 ) (5,971 ) Discounted future net cash flows $ 10,400 $ 11,623 $ 8,232 (1) This amount includes estimated abandonment costs. The following table sets forth the principal sources of change in the discounted future net cash flows: For the Year Ended December 31, 2019 2018 2017 (In thousands) Sales, net of production costs $ (554 ) $ (907 ) $ (391 ) Net change in prices and production costs (2,476 ) 4,996 2,821 Revisions of quantities 273 (1,820 ) 734 Accretion of discount 1,162 823 467 Changes in future development costs (1) (39 ) (257 ) 147 Previously estimated development costs incurred during the period 416 584 36 Changes in production rates and other (5 ) (28 ) (253 ) $ (1,223 ) $ 3,391 $ 3,561 (1) This amount includes estimated abandonment costs. |
SUPPLEMENTAL QUARTERLY FINANCIA
SUPPLEMENTAL QUARTERLY FINANCIAL DATA (Unaudited) | 12 Months Ended |
Dec. 31, 2019 | |
Quarterly Financial Information Disclosure [Abstract] | |
SUPPLEMENTAL QUARTERLY FINANCIAL DATA (Unaudited) | SUPPLEMENTAL QUARTERLY FINANCIAL DATA (Unaudited) First Second Third Fourth Total (In thousands, except per Unit amounts) 2019 Revenues $ 327 $ 331 $ 255 $ 294 $ 1,207 Expenses 293 272 279 372 1,216 Net income (loss) $ 34 $ 59 $ (24 ) $ (78 ) $ (9 ) Net income allocated to: Managing Partner $ 15 $ 21 $ 2 $ (8 ) $ 30 Investing Partners 19 38 (26 ) (70 ) (39 ) $ 34 $ 59 $ (24 ) $ (78 ) $ (9 ) Net income (loss) per Investing Partner Unit (1) $ 18 $ 37 $ (26 ) $ (68 ) $ (39 ) 2018 Revenues $ 368 $ 376 $ 406 $ 348 $ 1,498 Expenses 320 310 290 307 1,227 Net income $ 48 $ 66 $ 116 $ 41 $ 271 Net income allocated to: Managing Partner $ 23 $ 25 $ 33 $ 16 $ 97 Investing Partners 25 41 83 25 174 $ 48 $ 66 $ 116 $ 41 $ 271 Net income per Investing Partner Unit (1) $ 25 $ 41 $ 81 $ 23 $ 170 (1) The sum of the individual net income per Investing Partner Unit may not agree with the year-to-date net income per Investing Partner Unit as each quarterly computation is based on the weighted average number of Investing Partner Units during that period. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Statement Presentation | Statement Presentation The accompanying consolidated financial statements include the accounts of Apache Offshore Investment Partnership and Apache Offshore Petroleum Limited Partnership after elimination of intercompany balances and transactions. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP and the disclosure of contingent assets and liabilities requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Partnership bases its estimates on historical experience and various other assumptions that are believed to be reasonable under the circumstances. The Partnership evaluates its estimates and assumptions on a regular basis. Actual results may differ from these estimates and assumptions used in preparation of its financial statements and changes in these estimates are recorded when known. 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 (see Note 10—Supplemental Oil and Gas Disclosures (Unaudited)) and the assessment of asset retirement obligations (see Note 8—Asset Retirement Obligation). |
Cash Equivalents | Cash Equivalents The Partnership considers all highly liquid short-term investments with an original maturity of three months or less at the time of purchase to be cash equivalents. These investments are carried at cost, which approximates fair value. As of December 31, 2019 and 2018 , the Partnership had $5.0 million and $5.1 million , respectively, of cash and cash equivalents. |
Oil and Gas Properties | Oil and Gas Properties The Partnership follows the full-cost method of accounting for its investment in oil and gas properties for financial statement purposes. Under this method of accounting, the Partnership capitalizes all acquisition, exploration and development costs incurred for the purpose of finding oil and gas reserves. The amounts capitalized under this method include dry hole costs, leasehold costs, engineering, geological, exploration, development and other similar costs. All costs related to production and administrative functions are expensed in the period incurred. The Partnership includes the present value of its dismantlement, restoration, and abandonment costs within the capitalized oil and gas property balance as described in Note 8—Asset Retirement Obligation. Unless greater than 25 percent of the Partnership’s reserve volumes are sold, proceeds from the sale of oil and gas properties are accounted for as reductions to capitalized costs, and gains or losses are not recognized. Capitalized costs of oil and gas properties are amortized on the future gross revenue method whereby depreciation, depletion and amortization (DD&A) expense is computed quarterly by dividing current period oil and gas sales by estimated future gross revenue from proved oil and gas reserves (including current period oil and gas sales) and applying the resulting rate to the net cost of evaluated oil and gas properties, including estimated future development costs. Under the full-cost method of accounting, the Partnership limits the capitalized costs of proved oil and gas properties, net of accumulated DD&A, to the estimated future net cash flows from proved oil and gas reserves discounted at 10 percent , plus the lower of cost or fair value of unproved properties included in the costs being amortized, if any. This ceiling test is performed each quarter. If capitalized costs exceed this limit, the excess is charged to expense and reflected as additional DD&A in the accompanying statement of consolidated operations. 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. The Partnership did no t record any write-downs of capitalized costs during 2019, 2018, or 2017. See Note 10—Supplemental Oil and Gas Disclosures (Unaudited) for a discussion on the calculation of estimated future net cash flows. |
Asset Retirement Costs and Obligation | Asset Retirement Costs and Obligation The initial estimated asset retirement obligation related to property and equipment is recorded as a liability at its fair value, with an offsetting asset retirement cost recorded as an increase to oil and gas properties on the consolidated balance sheet. If the fair value of the recorded asset retirement obligation changes, a revision is recorded to both the asset retirement obligation and the asset retirement cost. Revisions in estimated liabilities can result from changes in estimated inflation rates, changes in service and equipment costs and changes in the estimated timing of settling asset retirement obligations. Accretion expense on the liability is recognized over the estimated productive life of the related assets. |
Revenue Recognition | Revenue Recognition The Partnership applies the provisions of Accounting Standards Codification 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. 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 production. 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. |
Insurance Coverage | Insurance Coverage The Partnership recognizes an insurance receivable when collection of the receivable is deemed probable. Any recognition of an insurance receivable is recorded by crediting and offsetting the original charge. Any differential arising between insurance recoveries and insurance receivables is recorded as a capitalized cost or as an expense, consistent with its original treatment. |
Net Income (Loss) Per Investing Unit | Net Income (Loss) Per Investing Unit The net income (loss) per Investing Partner Unit is calculated by dividing the aggregate Investing Partners’ net income for the period by the number of weighted average Investing Partner Units outstanding for that period. |
Income Taxes | Income Taxes The profit or loss of the Partnership for federal income tax reporting purposes is included in the income tax returns of the partners. Accordingly, no recognition has been given to income taxes in the accompanying financial statements. |
Receivable from / Payable to Apache Corporation | Receivable from/Payable to Apache Corporation The receivable from/payable to Apache Corporation, the Partnership’s 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. |
Maintenance and Repairs | Maintenance and Repairs Maintenance and repairs are charged to expense as incurred. |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements On January 1, 2019, the Partnership adopted Accounting Standards Update (ASU) 2016-02, “Leases (Topic 842),” on a prospective basis. The Partnership elected to adopt two transitional 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 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 an impact on the Partnership’s consolidated financial statements. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Disaggregation of Revenue | The table below presents the total oil, gas, and NGLs revenues of the Partnership for the years ended December 31, 2019, 2018 and 2017: For the Year Ended December 31, 2019 2018 2017 Oil $ 990,659 $ 1,253,490 $ 806,620 Gas 94,057 120,763 145,562 NGLs 15,618 42,681 24,213 Total Oil and Gas Revenue $ 1,100,334 $ 1,416,934 $ 976,395 |
COMPENSATION TO AFFILIATES (Tab
COMPENSATION TO AFFILIATES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Text Block [Abstract] | |
Compensation and Reimbursement for Costs and Expenses | Apache is entitled to the following types of compensation and reimbursement for costs and expenses. Total Reimbursed by the Investing Partners for the Year Ended December 31, 2019 2018 2017 (In thousands) a. Apache is reimbursed for general, administrative and overhead expenses incurred in connection with the management and operation of the Partnership’s business $ 263 $ 259 $ 252 b. Apache is reimbursed for development overhead costs incurred in the Partnership’s operations. These costs are based on development activities and are capitalized to oil and gas properties $ — $ — $ — |
OIL AND GAS PROPERTIES (Tables)
OIL AND GAS PROPERTIES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Extractive Industries [Abstract] | |
Direct Cost Information | The following tables contain direct cost information and changes in the Partnership’s oil and gas properties for each of the years referenced. All costs of oil and gas properties are currently being amortized. 2019 2018 2017 (In thousands) Oil and Gas Properties Balance, beginning of year $ 195,327 $ 195,005 $ 194,893 Costs incurred during the year: Development – Investing Partners 67 291 104 Managing Partner 7 31 8 Balance, end of year $ 195,401 $ 195,327 $ 195,005 |
Changes in Partnership's Oil and Gas Properties | Managing Partner Investing Partners Total (In thousands) Accumulated Depreciation, Depletion and Amortization Balance, December 31, 2016 $ 21,091 $ 169,546 $ 190,637 Provision 13 248 261 Balance, December 31, 2017 $ 21,104 $ 169,794 $ 190,898 Provision 16 281 297 Balance, December 31, 2018 $ 21,120 $ 170,075 $ 191,195 Provision 14 250 264 Balance, December 31, 2019 $ 21,134 $ 170,325 $ 191,459 |
ASSET RETIREMENT OBLIGATION (Ta
ASSET RETIREMENT OBLIGATION (Tables) | 12 Months Ended |
Dec. 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 (ARO) liability for the years ended December 31, 2019 and 2018 : 2019 2018 Asset retirement obligation at beginning of year $ 1,635,812 $ 1,789,267 Accretion expense 77,805 96,832 Liabilities settled (347,952 ) (555,500 ) Revisions in estimated liabilities 55,617 305,213 Asset retirement obligation at end of year $ 1,421,282 $ 1,635,812 Less current portion (614,493 ) (390,000 ) Asset retirement obligation, long-term $ 806,789 $ 1,245,812 |
TAX-BASIS FINANCIAL INFORMATI_2
TAX-BASIS FINANCIAL INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Reconciliation of Ordinary Income for Federal Income Tax Reporting Purposes | A reconciliation of ordinary income for federal income tax reporting purposes to net income under accounting principles generally accepted in the United States is as follows: 2019 2018 2017 Net partnership ordinary income (loss) for federal income tax reporting purposes $ (80,046 ) $ (196,919 ) $ 5,948 Plus: Items of current expense for tax reporting purposes only – Intangible drilling cost 113 16,859 33,479 Dismantlement and abandonment cost 347,952 555,501 2,849 Tax depreciation 64,537 289,455 66,618 412,602 861,815 102,946 Less: full cost DD&A expense (264,031 ) (297,328 ) (261,228 ) Less: asset retirement obligation accretion (77,805 ) (96,832 ) (105,135 ) Net income (loss) $ (9,280 ) $ 270,736 $ (257,469 ) |
Reconciliation of Liabilities for Federal Income Tax Reporting Purposes | A reconciliation of liabilities for federal income tax reporting purposes to liabilities under accounting principles generally accepted in the United States is as follows: December 31, 2019 2018 Liabilities for federal income tax purposes $ 160,999 $ 218,485 Asset retirement liability 1,421,282 1,635,812 Liabilities under accounting principles generally accepted in the United States $ 1,582,281 $ 1,854,297 |
SUPPLEMENTAL OIL AND GAS DISC_2
SUPPLEMENTAL OIL AND GAS DISCLOSURES (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Extractive Industries [Abstract] | |
Proved Reserves and Projecting Future Rates of Production and Timing of Development Expenditures | The following reserve data represents estimates only and should not be construed as being exact. (Oil and NGL in Mbbls and gas in MMcf) 2019 2018 2017 Oil NGL Gas Oil NGL Gas Oil NGL Gas Proved Reserves Beginning of year 363 29 670 376 54 1,016 365 53 985 Extensions, discoveries and other additions — — — — — — — — — Revisions of previous estimates 15 (1 ) (10 ) 6 (24 ) (309 ) 28 2 73 Production (17 ) (1 ) (34 ) (19 ) (1 ) (37 ) (17 ) (1 ) (42 ) End of year 361 27 626 363 29 670 376 54 1,016 Proved Developed Beginning of year 363 29 670 376 54 1,016 365 53 985 End of year 361 27 626 363 29 670 376 54 1,016 |
Discounted Future Net Cash Flows Relating to Proved Reserves | Discounted Future Net Cash Flows Relating to Proved Reserves December 31, 2019 2018 2017 (In thousands) Future cash inflows $ 24,158 $ 28,707 $ 25,968 Future production costs (5,540 ) (5,937 ) (7,808 ) Future development costs (1) (3,483 ) (3,831 ) (3,957 ) Net cash flows 15,135 18,939 14,203 10 percent annual discount rate (4,735 ) (7,316 ) (5,971 ) Discounted future net cash flows $ 10,400 $ 11,623 $ 8,232 (1) This amount includes estimated abandonment costs. |
Discounted Future Net Cash Flows | The following table sets forth the principal sources of change in the discounted future net cash flows: For the Year Ended December 31, 2019 2018 2017 (In thousands) Sales, net of production costs $ (554 ) $ (907 ) $ (391 ) Net change in prices and production costs (2,476 ) 4,996 2,821 Revisions of quantities 273 (1,820 ) 734 Accretion of discount 1,162 823 467 Changes in future development costs (1) (39 ) (257 ) 147 Previously estimated development costs incurred during the period 416 584 36 Changes in production rates and other (5 ) (28 ) (253 ) $ (1,223 ) $ 3,391 $ 3,561 (1) This amount includes estimated abandonment costs. |
SUPPLEMENTAL QUARTERLY FINANC_2
SUPPLEMENTAL QUARTERLY FINANCIAL DATA (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of Supplemental Quarterly Financial Data | First Second Third Fourth Total (In thousands, except per Unit amounts) 2019 Revenues $ 327 $ 331 $ 255 $ 294 $ 1,207 Expenses 293 272 279 372 1,216 Net income (loss) $ 34 $ 59 $ (24 ) $ (78 ) $ (9 ) Net income allocated to: Managing Partner $ 15 $ 21 $ 2 $ (8 ) $ 30 Investing Partners 19 38 (26 ) (70 ) (39 ) $ 34 $ 59 $ (24 ) $ (78 ) $ (9 ) Net income (loss) per Investing Partner Unit (1) $ 18 $ 37 $ (26 ) $ (68 ) $ (39 ) 2018 Revenues $ 368 $ 376 $ 406 $ 348 $ 1,498 Expenses 320 310 290 307 1,227 Net income $ 48 $ 66 $ 116 $ 41 $ 271 Net income allocated to: Managing Partner $ 23 $ 25 $ 33 $ 16 $ 97 Investing Partners 25 41 83 25 174 $ 48 $ 66 $ 116 $ 41 $ 271 Net income per Investing Partner Unit (1) $ 25 $ 41 $ 81 $ 23 $ 170 (1) The sum of the individual net income per Investing Partner Unit may not agree with the year-to-date net income per Investing Partner Unit as each quarterly computation is based on the weighted average number of Investing Partner Units during that period. |
ORGANIZATION (Detail)
ORGANIZATION (Detail) | Mar. 22, 2019 | Dec. 31, 2019LeaseVentureshares | Dec. 31, 1989$ / shares | Dec. 31, 1988$ / shares | Dec. 31, 2018shares |
Schedule Of Organization [Line Items] | |||||
Full purchase price (in USD per Unit) | $ 150,000 | ||||
Discount percentage on full purchase price | 5.00% | ||||
Investor subscription units (in USD per Unit) | $ 85,000 | ||||
Percentage share held in partnership | 5.00% | ||||
Investing partners, units outstanding (in shares) | shares | 1,021.5 | 1,021.5 | |||
Percentage interest Purchased in offshore leasehold | 85.00% | ||||
Number of federal lease tracts | Lease | 87 | ||||
Percentage of remaining interest purchased | 15.00% | ||||
Number of remaining ventures | Venture | 1 | ||||
Working percentage interest | 7.08% | ||||
Percentage of exploration and development costs incurred paid by Company | 10.00% | ||||
Percentage of expenses related to loans | 1.00% | ||||
Notice of intention to withdrawal, notice period | 120 days | ||||
Investing Partners | |||||
Schedule Of Organization [Line Items] | |||||
Percent of revenues | 80.00% | ||||
Percentage of interest income earned on short term cash investments | 100.00% | ||||
Percentage of exploration and development costs incurred paid by Partners | 90.00% | ||||
Percentage of expenses related to loans | 99.00% | ||||
Percentage of partner's total amount equals to cost | 90.00% | ||||
Managing Partner | |||||
Schedule Of Organization [Line Items] | |||||
Percent of revenues | 20.00% |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Additional Information (Detail) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Accounting Policies [Abstract] | |||
Cash and cash equivalents | $ 5,020,432 | $ 5,103,336 | |
Percentage of reserve volumes sold | 25.00% | ||
Estimated future net cash flows from proved oil and gas reserves | 10.00% | ||
Non-cash write-downs of carrying value of proved oil and gas properties | $ 0 | 0 | $ 0 |
Receivables from contracts with customers | $ 108,693 | $ 120,116 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Disaggregation of Revenue (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Disaggregation of Revenue [Line Items] | |||
Oil and gas sales | $ 1,100,334 | $ 1,416,934 | $ 976,395 |
Oil | |||
Disaggregation of Revenue [Line Items] | |||
Oil and gas sales | 990,659 | 1,253,490 | 806,620 |
Gas | |||
Disaggregation of Revenue [Line Items] | |||
Oil and gas sales | 94,057 | 120,763 | 145,562 |
NGL | |||
Disaggregation of Revenue [Line Items] | |||
Oil and gas sales | $ 15,618 | $ 42,681 | $ 24,213 |
COMPENSATION TO AFFILIATES (Det
COMPENSATION TO AFFILIATES (Detail) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Investments in and Advances to Affiliates, Schedule of Investments [Abstract] | |||
Reimbursement of general, administrative and overhead expenses incurred in connection with the management and operation of the Partnership's business | $ 263,000 | $ 259,000 | $ 252,000 |
Reimbursement of development overhead costs which are based on development activities and are capitalized to oil and gas properties | $ 0 | $ 0 | $ 0 |
OIL AND GAS PROPERTIES - Direct
OIL AND GAS PROPERTIES - Direct Cost Information (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Direct Cost Changes In Partnership's Oil And Gas Properties [Roll Forward] | |||
Balance, beginning of year | $ 195,327 | $ 195,005 | $ 194,893 |
Development - Investing Partners | 67 | 291 | 104 |
Development - Managing Partner | 7 | 31 | 8 |
Balance, end of year | $ 195,401 | $ 195,327 | $ 195,005 |
OIL AND GAS PROPERTIES - Additi
OIL AND GAS PROPERTIES - Additional Information (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Extractive Industries [Abstract] | |||
Upward (negative) revisions of abandonment cost and deferral of abandonment | $ 56 | $ (305) | $ (66) |
Asset retirement expense | $ 18 | $ 17 | $ 178 |
DD&A rate as percentage of oil and gas sales | 24.00% | 21.00% | 27.00% |
OIL AND GAS PROPERTIES - Change
OIL AND GAS PROPERTIES - Changes in Partnership's Oil and Gas Properties (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Movement In Capitalized Costs, Accumulated Depreciation, Depletion, Amortization Relating To Oil And Gas Producing Activities [Roll Forward] | |||
Beginning Balance | $ 191,195 | $ 190,898 | $ 190,637 |
Provision | 264 | 297 | 261 |
Ending Balance | 191,459 | 191,195 | 190,898 |
Managing Partner | |||
Movement In Capitalized Costs, Accumulated Depreciation, Depletion, Amortization Relating To Oil And Gas Producing Activities [Roll Forward] | |||
Beginning Balance | 21,120 | 21,104 | 21,091 |
Provision | 14 | 16 | 13 |
Ending Balance | 21,134 | 21,120 | 21,104 |
Investing Partners | |||
Movement In Capitalized Costs, Accumulated Depreciation, Depletion, Amortization Relating To Oil And Gas Producing Activities [Roll Forward] | |||
Beginning Balance | 170,075 | 169,794 | 169,546 |
Provision | 250 | 281 | 248 |
Ending Balance | $ 170,325 | $ 170,075 | $ 169,794 |
MAJOR CUSTOMER AND RELATED PA_2
MAJOR CUSTOMER AND RELATED PARTIES INFORMATION (Detail) - Customer Concentration Risk - Sales | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Fieldwood Energy LLC | |||
Revenue, Major Customer [Line Items] | |||
Concentration risk percentage | 10.00% | 12.00% | 18.00% |
Chevron Products Company | |||
Revenue, Major Customer [Line Items] | |||
Concentration risk percentage | 90.00% | 88.00% | 82.00% |
ASSET RETIREMENT OBLIGATION (De
ASSET RETIREMENT OBLIGATION (Detail) - USD ($) | 12 Months Ended | ||||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2019 | Dec. 31, 2018 | |
Asset Retirement Obligation, Roll Forward Analysis [Roll Forward] | |||||
Asset retirement obligation at beginning of year | $ 1,635,812 | $ 1,789,267 | |||
Accretion expense | 77,805 | 96,832 | $ 105,135 | ||
Liabilities settled | (347,952) | (555,500) | |||
Revisions in estimated liabilities | 55,617 | 305,213 | |||
Asset retirement obligation at end of year | 1,421,282 | 1,635,812 | 1,789,267 | ||
Asset retirement obligation at end of year | $ 1,421,282 | $ 1,789,267 | $ 1,789,267 | $ 1,421,282 | $ 1,635,812 |
Less current portion | (614,493) | (390,000) | |||
Asset retirement obligation, long-term | $ 806,789 | $ 1,245,812 |
TAX-BASIS FINANCIAL INFORMATI_3
TAX-BASIS FINANCIAL INFORMATION - Reconciliation of Ordinary Income for Federal Income Tax Reporting Purposes (Detail) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |||||||||||
Net partnership ordinary income (loss) for federal income tax reporting purposes | $ (80,046) | $ (196,919) | $ 5,948 | ||||||||
Plus: Items of current expense for tax reporting purposes only – | |||||||||||
Intangible drilling cost | 113 | 16,859 | 33,479 | ||||||||
Dismantlement and abandonment cost | 347,952 | 555,501 | 2,849 | ||||||||
Tax depreciation | 64,537 | 289,455 | 66,618 | ||||||||
Non deductible expenses for federal income tax purposes | 412,602 | 861,815 | 102,946 | ||||||||
Less: full cost DD&A expense | (264,031) | (297,328) | (261,228) | ||||||||
Less: asset retirement obligation accretion | (77,805) | (96,832) | (105,135) | ||||||||
Net loss | $ (78,000) | $ (24,000) | $ 59,000 | $ 34,000 | $ 41,000 | $ 116,000 | $ 66,000 | $ 48,000 | $ (9,280) | $ 270,736 | $ (257,469) |
TAX-BASIS FINANCIAL INFORMATI_4
TAX-BASIS FINANCIAL INFORMATION - Additional Information (Detail) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Income Tax Disclosure [Abstract] | ||
Tax bases in net oil and gas properties | $ 2,505,692 | $ 2,649,454 |
Capitalized syndication cost | $ 8,660,878 | $ 8,660,878 |
TAX-BASIS FINANCIAL INFORMATI_5
TAX-BASIS FINANCIAL INFORMATION - Reconciliation of Liabilities for Federal Income Tax Reporting Purposes (Detail) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Income Tax Disclosure [Abstract] | |||
Liabilities for federal income tax purposes | $ 160,999 | $ 218,485 | |
Asset retirement liability | 1,421,282 | 1,635,812 | $ 1,789,267 |
Liabilities under accounting principles generally accepted in the United States | $ 1,582,281 | $ 1,854,297 |
SUPPLEMENTAL OIL AND GAS DISC_3
SUPPLEMENTAL OIL AND GAS DISCLOSURES (Unaudited) - Proved Reserves and Projecting Future Rates of Production and Timing of Development Expenditures (Detail) | 12 Months Ended | ||
Dec. 31, 2019MMcfMBbls | Dec. 31, 2018MMcfMBbls | Dec. 31, 2017MMcfMBbls | |
Proved Developed and Undeveloped Reserves [Roll Forward] | |||
Percentage of estimated proved developed reserves classified as proved not producing | 89.00% | ||
Oil | Proved Reserves | |||
Proved Developed and Undeveloped Reserves [Roll Forward] | |||
Beginning of year | 363 | 376 | 365 |
Extensions, discoveries and other additions | 0 | 0 | 0 |
Revisions of previous estimates | 15 | 6 | 28 |
Production | (17) | (19) | (17) |
End of year | 361 | 363 | 376 |
Oil | Proved Developed | |||
Proved Developed and Undeveloped Reserves [Roll Forward] | |||
Beginning of year | 363 | 376 | 365 |
End of year | 361 | 363 | 376 |
NGL | Proved Reserves | |||
Proved Developed and Undeveloped Reserves [Roll Forward] | |||
Beginning of year | 29 | 54 | 53 |
Extensions, discoveries and other additions | 0 | 0 | 0 |
Revisions of previous estimates | (1) | (24) | 2 |
Production | (1) | (1) | (1) |
End of year | 27 | 29 | 54 |
NGL | Proved Developed | |||
Proved Developed and Undeveloped Reserves [Roll Forward] | |||
Beginning of year | 29 | 54 | 53 |
End of year | 27 | 29 | 54 |
Gas | Proved Reserves | |||
Proved Developed and Undeveloped Reserves [Roll Forward] | |||
Beginning of year | MMcf | 670 | 1,016 | 985 |
Extensions, discoveries and other additions | MMcf | 0 | 0 | 0 |
Revisions of previous estimates | MMcf | (10) | (309) | 73 |
Production | MMcf | (34) | (37) | (42) |
End of year | MMcf | 626 | 670 | 1,016 |
Gas | Proved Developed | |||
Proved Developed and Undeveloped Reserves [Roll Forward] | |||
Beginning of year | MMcf | 670 | 1,016 | 985 |
End of year | MMcf | 626 | 670 | 1,016 |
SUPPLEMENTAL OIL AND GAS DISC_4
SUPPLEMENTAL OIL AND GAS DISCLOSURES (Unaudited) - Discounted Future Net Cash Flows Relating to Proved Reserves (Detail) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Supplemental Oil And Gas Disclosures [Abstract] | |||
Future cash inflows | $ 24,158 | $ 28,707 | $ 25,968 |
Future production costs | (5,540) | (5,937) | (7,808) |
Future development costs | (3,483) | (3,831) | (3,957) |
Net cash flows | 15,135 | 18,939 | 14,203 |
10 percent annual discount rate | (4,735) | (7,316) | (5,971) |
Discounted future net cash flows | $ 10,400 | $ 11,623 | $ 8,232 |
SUPPLEMENTAL OIL AND GAS DISC_5
SUPPLEMENTAL OIL AND GAS DISCLOSURES (Unaudited) - Discounted Future Net Cash Flows (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Supplemental Oil And Gas Disclosures [Abstract] | |||
Sales, net of production costs | $ (554) | $ (907) | $ (391) |
Net change in prices and production costs | (2,476) | 4,996 | 2,821 |
Revisions of quantities | 273 | (1,820) | 734 |
Accretion of discount | 1,162 | 823 | 467 |
Changes in future development costs | (39) | (257) | 147 |
Previously estimated development costs incurred during the period | 416 | 584 | 36 |
Changes in production rates and other | (5) | (28) | (253) |
Total | $ (1,223) | $ 3,391 | $ 3,561 |
SUPPLEMENTAL QUARTERLY FINANC_3
SUPPLEMENTAL QUARTERLY FINANCIAL DATA (Unaudited) (Detail) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Revenues | $ 294,000 | $ 255,000 | $ 331,000 | $ 327,000 | $ 348,000 | $ 406,000 | $ 376,000 | $ 368,000 | $ 1,207,121 | $ 1,498,302 | $ 1,008,499 |
Expenses | 372,000 | 279,000 | 272,000 | 293,000 | 307,000 | 290,000 | 310,000 | 320,000 | 1,216,401 | 1,227,566 | 1,265,968 |
NET INCOME (LOSS) | (78,000) | (24,000) | 59,000 | 34,000 | 41,000 | 116,000 | 66,000 | 48,000 | (9,280) | 270,736 | (257,469) |
NET INCOME (LOSS) ALLOCATED TO: | |||||||||||
Managing Partner | (8,000) | 2,000 | 21,000 | 15,000 | 16,000 | 33,000 | 25,000 | 23,000 | 30,385 | 96,704 | (5,899) |
Investing Partners | (70,000) | (26,000) | 38,000 | 19,000 | 25,000 | 83,000 | 41,000 | 25,000 | (39,665) | 174,032 | (251,570) |
NET INCOME (LOSS) | $ (78,000) | $ (24,000) | $ 59,000 | $ 34,000 | $ 41,000 | $ 116,000 | $ 66,000 | $ 48,000 | $ (9,280) | $ 270,736 | $ (257,469) |
Net income (loss) per Investing Partner Unit (in USD per share) | $ (68) | $ (26) | $ 37 | $ 18 | $ 23 | $ 81 | $ 41 | $ 25 | $ (39) | $ 170 | $ (246) |