Cover
Cover | 3 Months Ended |
Mar. 31, 2023 shares | |
Cover [Abstract] | |
Document Type | 10-Q |
Document Quarterly Report | true |
Document Period End Date | Mar. 31, 2023 |
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 |
Entity Current Reporting Status | Yes |
Entity Interactive Data Current | Yes |
Entity Emerging Growth Company | false |
Entity Filer Category | Non-accelerated Filer |
Entity Small Business | true |
Entity Shell Company | false |
Entity Common Stock, Shares Outstanding | 1,019 |
Amendment Flag | false |
Document Fiscal Year Focus | 2023 |
Document Fiscal Period Focus | Q1 |
Entity Central Index Key | 0000727538 |
Current Fiscal Year End Date | --12-31 |
STATEMENT OF CONSOLIDATED OPERA
STATEMENT OF CONSOLIDATED OPERATIONS (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
REVENUES: | ||
Oil and gas sales | $ 307,137 | $ 474,092 |
Interest income | 46,465 | 56 |
Total Revenues | $ 353,602 | $ 474,148 |
Revenue from Contract with Customer, Product and Service [Extensible Enumeration] | Oil and Gas [Member] | Oil and Gas [Member] |
EXPENSES: | ||
Depreciation, depletion and amortization | $ 56,716 | $ 124,498 |
Asset retirement obligation accretion | 15,466 | 19,998 |
Lease operating expenses | 168,200 | 114,800 |
Gathering and transportation costs | 6,254 | 2,742 |
Administrative | 76,350 | 74,572 |
Total Expenses | 322,986 | 336,610 |
NET INCOME | 30,616 | 137,538 |
NET INCOME ALLOCATED TO: | ||
Managing Partner | 10,618 | 47,946 |
Investing Partners | 19,998 | 89,592 |
NET INCOME | $ 30,616 | $ 137,538 |
NET INCOME (LOSS) PER INVESTING PARTNER UNIT (in USD per share) | $ 20 | $ 88 |
WEIGHTED AVERAGE INVESTING PARTNER UNITS OUTSTANDING (in shares) | 1,018.5 | 1,018.5 |
STATEMENT OF CONSOLIDATED CASH
STATEMENT OF CONSOLIDATED CASH FLOWS (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income | $ 30,616 | $ 137,538 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation, depletion and amortization | 56,716 | 124,498 |
Asset retirement obligation accretion | 15,466 | 19,998 |
Changes in operating assets and liabilities: | ||
Accrued receivables | 72,395 | (216,777) |
Receivable from/payable to Apache Corporation | (26,598) | 38,014 |
Accrued operating expenses | 41,016 | (93,987) |
Asset retirement obligations | 0 | (3,081) |
Net cash provided by operating activities | 189,611 | 6,203 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Contributions from (distributions to) Managing Partner | (33,949) | 4,916 |
Net cash provided by (used in) financing activities | (33,949) | 4,916 |
NET INCREASE IN CASH AND CASH EQUIVALENTS | 155,662 | 11,119 |
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR | 4,669,084 | 4,161,783 |
CASH AND CASH EQUIVALENTS, END OF PERIOD | $ 4,824,746 | $ 4,172,902 |
CONSOLIDATED BALANCE SHEET (Una
CONSOLIDATED BALANCE SHEET (Unaudited) - USD ($) | Mar. 31, 2023 | Dec. 31, 2022 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 4,824,746 | $ 4,669,084 |
Accrued revenues receivable | 187,541 | 259,936 |
Total Current Assets | 5,012,287 | 4,929,020 |
OIL AND GAS PROPERTIES, on the basis of full cost accounting: | ||
Proved properties | 195,940,084 | 195,923,083 |
Less – Accumulated depreciation, depletion and amortization | (192,269,037) | (192,212,321) |
Total oil and gas properties, on the basis of full cost accounting | 3,671,047 | 3,710,762 |
Total Assets | 8,683,334 | 8,639,782 |
CURRENT LIABILITIES: | ||
Payable to Apache Corporation | 1,337 | 27,935 |
Asset retirement obligation | 408,339 | 408,339 |
Accrued operating expenses | 105,800 | 64,784 |
Accrued decommissioning, abandonment, and development costs | 0 | 9,919 |
Total Current Liabilities | 515,476 | 510,977 |
ASSET RETIREMENT OBLIGATION | 1,079,560 | 1,037,174 |
PARTNERS’ CAPITAL: | ||
Managing Partner | 521,945 | 545,276 |
Investing Partners (1,018.5 units outstanding) | 6,566,353 | 6,546,355 |
Total Partners' Capital | 7,088,298 | 7,091,631 |
Total liabilities and partners' capital | $ 8,683,334 | $ 8,639,782 |
CONSOLIDATED BALANCE SHEET (U_2
CONSOLIDATED BALANCE SHEET (Unaudited) (Parenthetical) - shares | Mar. 31, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Investing partners, units outstanding (in shares) | 1,018.5 | 1,018.5 |
STATEMENT OF CONSOLIDATED CHANG
STATEMENT OF CONSOLIDATED CHANGES IN PARTNERS' CAPITAL (Unaudited) - USD ($) | Total | Managing Partner | Investing Partners |
BALANCE BEGINNING at Dec. 31, 2021 | $ 6,628,523 | $ 481,815 | $ 6,146,708 |
Increase (Decrease) in Partners' Capital [Roll Forward] | |||
Contributions (Distributions) | 4,916 | 4,916 | |
Net income | 137,538 | 47,946 | 89,592 |
BALANCE ENDING at Mar. 31, 2022 | 6,770,977 | 534,677 | 6,236,300 |
BALANCE BEGINNING at Dec. 31, 2022 | 7,091,631 | 545,276 | 6,546,355 |
Increase (Decrease) in Partners' Capital [Roll Forward] | |||
Contributions (Distributions) | (33,949) | (33,949) | |
Net income | 30,616 | 10,618 | 19,998 |
BALANCE ENDING at Mar. 31, 2023 | $ 7,088,298 | $ 521,945 | $ 6,566,353 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
ORGANIZATION, CONSOLIDATION AND PRESENTATION OF FINANCIAL STATEMENTS DISCLOSURE | Apache Offshore Investment Partnership, a Delaware general partnership (the Investment Partnership), was formed on October 31, 1983, consisting of Apache Corporation, a Delaware corporation (Apache or the Managing Partner), as Managing Partner, and public investors (the Investing Partners). The Investment Partnership invested its entire capital in Apache Offshore Petroleum Limited Partnership, a Delaware limited partnership (the Operating Partnership). The primary business of the Investment Partnership is to serve as the sole limited partner of the Operating Partnership. The accompanying financial statements include the accounts of both the Investment Partnership and the Operating Partnership. The term “Partnership,” as used herein, refers to the Investment Partnership or the Operating Partnership, as the case may be. These financial statements have been prepared by the Partnership, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). They reflect all adjustments that are, in the opinion of management, necessary for a fair statement of the results for the interim periods, on a basis consistent with the annual audited financial statements. Certain information, accounting policies, and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (U.S. GAAP) have been omitted pursuant to such rules and regulations, although the Partnership believes that the disclosures are adequate to make the information presented not misleading. These financial statements should be read in conjunction with the Partnership’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022, which contains a summary of the Partnership’s significant accounting policies and other disclosures. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES As of March 31, 2023, 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, 2022. 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 (Unaudited) to the consolidated financial statements contained in the Partnership’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022. Any excess of the net book value of proved oil and gas properties over the ceiling is charged to expense and reflected as “Additional depreciation, depletion and amortization” in the accompanying statement of consolidated operations. Such limitations are tested quarterly. The Partnership had no write-downs of the carrying value of its proved oil and gas properties during the first three months of 2023 and 2022. Revenue Recognition There have been no significant changes to the Partnership’s contracts with customers during the three months ended March 31, 2023. The Partnership generates revenue from its contracts with customers from the sale of its crude oil, natural gas, and NGL production volumes. Under these short-term commodity sales contracts, the physical delivery of each unit of quantity represents a single, distinct performance obligation on behalf of the Partnership. Contract prices are determined based on market-indexed prices, adjusted for quality, transportation, and other market-reflective differentials. Revenue is measured by allocating an entirely variable market price to each performance obligation and recognized at a point in time when control is 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, and the Partnership’s right to payment. Control typically transfers to customers upon the physical delivery at specified locations within each contract and the transfer of title. The table below presents revenues from contracts with customers disaggregated by product type for the three months ended March 31, 2023 and 2022: For the Three Months Ended March 31, 2023 2022 Oil $ 268,465 $ 430,620 Gas 31,939 37,757 NGLs 6,733 5,715 Total Oil and Gas Revenue $ 307,137 $ 474,092 The Partnership records trade accounts receivable for its unconditional rights to consideration arising under sales contracts with customers, which is measured at amortized cost net of any allowance for credit losses. The Partnership routinely assesses the collectability of all material trade and other receivables. The Partnership would accrue an allowance for expected credit losses when, based on the judgment of management, it is probable that a receivable will not be collected and the amount of any expected credit losses may be reasonably estimated. As of March 31, 2023, 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 $187,541 and $259,936 as of March 31, 2023 and December 31, 2022, respectively. The Partnership had no allowance for expected credit losses recorded for any comparative periods presented. |
RECEIVABLE FROM _ PAYABLE TO AP
RECEIVABLE FROM / PAYABLE TO APACHE CORPORATION | 3 Months Ended |
Mar. 31, 2023 | |
Related Party Transactions [Abstract] | |
RECEIVABLE FROM / PAYABLE TO APACHE CORPORATION | RECEIVABLE FROM / PAYABLE TO APACHE CORPORATIONThe receivable from/payable to Apache represents the net result of the Investing Partners’ revenue received and expenditures paid in the current month. Generally, cash in this amount will be paid by Apache to the Partnership or transferred to Apache in the month after the Partnership’s transactions are processed and the net results of operations are determined. |
ASSET RETIREMENT OBLIGATIONS
ASSET RETIREMENT OBLIGATIONS | 3 Months Ended |
Mar. 31, 2023 | |
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 three months of 2023: Asset retirement obligation at December 31, 2022 $ 1,445,513 Accretion expense 15,466 Revisions in estimated liabilities 26,920 Asset retirement obligation at March 31, 2023 1,487,899 Less current portion (408,339) Asset retirement obligation, long-term $ 1,079,560 |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 3 Months Ended |
Mar. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS Certain assets and liabilities are reported at fair value on a recurring basis in the Partnership’s consolidated balance sheet. As of March 31, 2023 and December 31, 2022, the carrying amounts of the Partnership’s current assets and current liabilities approximated fair value because of the short-term nature or maturity of these instruments. The Partnership did not use derivative financial instruments or otherwise engage in hedging activities during the three months ended March 31, 2023 and 2022. |
NOTICE OF WITHDRAWAL AND RIGHT
NOTICE OF WITHDRAWAL AND RIGHT OF PRESENTMENT | 3 Months Ended |
Mar. 31, 2023 | |
Partners' Capital [Abstract] | |
NOTICE OF WITHDRAWAL AND RIGHT OF PRESENTMENT | NOTICE OF WITHDRAWAL AND RIGHT OF PRESENTMENT 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. On April 26, 2019, the Managing Partner determined that, during the withdrawal and dissolution process, it would be inconsistent with the Managing Partner’s fiduciary duties to purchase (or to cause the Investment Partnership to purchase) outstanding units of partnership interests (Units) from the holders thereof pursuant to the right of presentment provided for in Sections 6.9 through 6.14 of the Partnership Agreement of the Investment Partnership (the Partnership Agreement). As a result of this determination by the Managing Partner, pursuant to Section 6.12 of the Partnership Agreement, the right of presentment 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 of the Partnership Agreement. Prior to terminating the right of presentment, the Investment Partnership had not made a repurchase under the right of presentment since 2008. |
FINANCIAL CONDITION OF THE OPER
FINANCIAL CONDITION OF THE OPERATOR OF THE PARTNERSHIP'S PRODUCING LEASE | 3 Months Ended |
Mar. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
FINANCIAL CONDITION OF THE OPERATOR OF THE PARTNERSHIP’S PRODUCING LEASE | FINANCIAL CONDITION OF THE OPERATOR OF THE PARTNERSHIP’S PRODUCING LEASEOn August 3, 2020, Fieldwood Energy LLC, the operator of the Partnership’s producing lease, and certain of its affiliated debtors (collectively, Fieldwood) filed for protection under Chapter 11 of the United States Bankruptcy Code. On June 25, 2021, the United States Bankruptcy Court for the Southern District of Texas (Houston Division) entered an order confirming Fieldwood’s bankruptcy plan. On August 27, 2021, Fieldwood’s bankruptcy plan became effective. Pursuant to the plan, Fieldwood separated its ownership in and operatorship of the Partnership’s producing lease, together with several of Fieldwood’s other leases, into a standalone company (GOM Shelf, LLC), which will continue to perform Fieldwood’s obligations with respect to the Partnership’s properties. The reorganization of Fieldwood under the plan has not had and is not expected to have any material adverse effect on the Partnership’s operations. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2023 | |
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 (Unaudited) to the consolidated financial statements contained in the Partnership’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022. Any excess of the net book value of proved oil and gas properties over the ceiling is charged to expense and reflected as “Additional depreciation, depletion and amortization” in the accompanying statement of consolidated operations. Such limitations are tested quarterly. The Partnership had no write-downs of the carrying value of its proved oil and gas properties during the first three months of 2023 and 2022. |
Revenue Recognition | Revenue Recognition There have been no significant changes to the Partnership’s contracts with customers during the three months ended March 31, 2023. The Partnership generates revenue from its contracts with customers from the sale of its crude oil, natural gas, and NGL production volumes. Under these short-term commodity sales contracts, the physical delivery of each unit of quantity represents a single, distinct performance obligation on behalf of the Partnership. Contract prices are determined based on market-indexed prices, adjusted for quality, transportation, and other market-reflective differentials. Revenue is measured by allocating an entirely variable market price to each performance obligation and recognized at a point in time when control is 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, and the Partnership’s right to payment. Control typically transfers to customers upon the physical delivery at specified locations within each contract and the transfer of title. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Schedule of Disaggregation of Revenue | The table below presents revenues from contracts with customers disaggregated by product type for the three months ended March 31, 2023 and 2022: For the Three Months Ended March 31, 2023 2022 Oil $ 268,465 $ 430,620 Gas 31,939 37,757 NGLs 6,733 5,715 Total Oil and Gas Revenue $ 307,137 $ 474,092 |
ASSET RETIREMENT OBLIGATIONS (T
ASSET RETIREMENT OBLIGATIONS (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Asset Retirement Obligation Disclosure [Abstract] | |
Schedule of Changes to Partnership's Asset Retirement Obligation Liability | The following table describes the changes to the Partnership’s asset retirement obligation liability for the first three months of 2023: Asset retirement obligation at December 31, 2022 $ 1,445,513 Accretion expense 15,466 Revisions in estimated liabilities 26,920 Asset retirement obligation at March 31, 2023 1,487,899 Less current portion (408,339) Asset retirement obligation, long-term $ 1,079,560 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Additional Information (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Accounting Policies [Abstract] | |||
Impairment of oil and gas properties | $ 0 | $ 0 | |
Receivables from contracts with customers | 187,541 | $ 259,936 | |
Allowance for doubtful accounts | $ 0 | $ 0 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Disaggregation of Revenue (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Disaggregation of Revenue [Line Items] | ||
Oil and gas sales | $ 307,137 | $ 474,092 |
Oil | ||
Disaggregation of Revenue [Line Items] | ||
Oil and gas sales | 268,465 | 430,620 |
Gas | ||
Disaggregation of Revenue [Line Items] | ||
Oil and gas sales | 31,939 | 37,757 |
NGLs | ||
Disaggregation of Revenue [Line Items] | ||
Oil and gas sales | $ 6,733 | $ 5,715 |
ASSET RETIREMENT OBLIGATIONS (D
ASSET RETIREMENT OBLIGATIONS (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Asset Retirement Obligation, Roll Forward Analysis [Roll Forward] | |||
Asset retirement obligation, beginning balance | $ 1,445,513 | ||
Accretion expense | 15,466 | $ 19,998 | |
Revisions in estimated liabilities | 26,920 | ||
Asset retirement obligation, ending balance | 1,487,899 | ||
Asset retirement obligation | 1,487,899 | $ 1,445,513 | |
Less current portion | (408,339) | (408,339) | |
Asset retirement obligation, long-term | $ 1,079,560 | $ 1,037,174 |
NOTICE OF WITHDRAWAL AND RIGH_2
NOTICE OF WITHDRAWAL AND RIGHT OF PRESENTMENT (Details) | Mar. 22, 2019 |
Partners' Capital [Abstract] | |
Partners' capital, notice of intention to withdrawal, notice period | 120 days |