This report includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical facts included or incorporated by reference in this report, including, without limitation, statements regarding the Partnership’s (as defined below in the Notes to Consolidated Financial Statements) future financial position, business strategy, budgets, projected revenues, projected costs and plans, and objectives of management for future operations, are forward-looking statements. Such forward-looking statements are based on the Partnership’s examination of historical operating trends, the information that was used to prepare the Partnership’s estimate of proved reserves as of December 31, 2020, and other data in its possession or available from third parties. In addition, forward-looking statements generally can be identified by the use of forward-looking terminology such as “may,” “will,” “could,” “expect,” “intend,” “project,” “estimate,” “anticipate,” “plan,” “believe,” “continue,” “seek,” “guidance,” “might,” “outlook,” “possibly,” “potential,” “prospect,” “should,” “would,” or similar terminology.terminology, but the absence of these words does not mean a statement is not forward looking. Although the Partnership believes that the expectations reflected in such forward-looking statements are reasonable under the circumstances, it can give no assurance that such expectations will prove to have been correct. Important factors that could cause actual results to differ materially from the Partnership’s expectations include, but are not limited to, the Partnership’s assumptions about:

As of March 31,September 30, 2021, 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, 2020.

The receivable from/payable to Apache represents the net result of the Investing Partners’ revenue received and expenditures paid in the current month. Generally, cash in this amount will be paid by Apache to the Partnership or transferred to Apache in the month after the Partnership’s transactions are processed and the net results of operations are determined.

The following table describes the changes to the Partnership’s asset retirement obligation liability for the first threenine months of 2021:

The Partnership reported a net loss of $63,840$213,064 ($65168 per Investing Partner Unit) for the firstthird quarter of 2021 compared to a net loss of $21,657$120,031 ($25101 per Investing Partner Unit) in the third quarter of 2020. For the first nine months of 2021, the Partnership reported a net loss of $328,131 ($283 per Investing Partner Unit) compared to a net loss of $270,454 ($232 per Investing Partner Unit) in the first quarternine months of 2020.

The Partnership’sPartnership recorded no crude oil sales and no crude oil volumes for the third quarter of 2021 compared to $96,312 and 29 barrels per day in the third quarter of 2020, respectively, in each case as a result of the wells being shut-in at South Timbalier 295.

Crude oil sales for the first quarternine months of 2021 totaled $225,221,$402,244, increasing 106 percent compared to $204,469$379,445 in the first quarternine months of 2020. The Partnership’s average realized oil price in the first quarternine months of 2021 increased $7.71$19.10 per barrel from the first quarternine months of 2020, increasing sales by $35,360.$197,213. Crude oil volumes decreased to 4826 barrels per day in the first nine months of 2021, compared to 38 barrels per day in the same prior year period, as a result of the shut-in of wells at South Timbalier 295 starting in June 2021. The decrease in production reduced sales by $174,414.

The Partnership’sPartnership recognized no depreciation, depletion and amortization (DD&A), expense during the third quarter of 2021, as a result of the wells being shut-in at South Timbalier 295. DD&A expense expressed as a percentage of oil and gas sales was approximately 3835 percent for the first threenine months of 2021, compared to approximately 2831 percent for the first threenine months of 2020. The higher depletion percentage was primarily the result of higher sales revenue for the quarter and lower estimated future gross revenues from proved oil and gas reserves, which are based on an unweighted arithmetic average of commodity prices in effect for the first day of each of the previous 12 months, held flat for the life of expected production.

The Partnership’s primary capital resource is net cash provided by operating activities. During the first threenine months of 2021, the Partnership had $23,809recorded $257,164 of net cash inflow fromoutflow used in operating activities, compared to $194,290$438,142 of net cash outflow in the first threenine months of 2020. The increasedecrease in operating cash flowsoutflow used was primarily the result of reduced plugging and abandonment spending at Ship Shoal 258/259 comparedas abandonment activities are nearing completion based on the most recent estimates by the operator.

The Partnership’s primary needs for cash are for operating expenses, recompletion expenditures, and future dismantlement and abandonment costs. To the extent there is discretion, the Partnership allocates available capital to investment in the Partnership’s properties so as to maximize production and resultant cash flow. The Partnership had no outstanding debt or lease commitments at March 31,September 30, 2021. The Partnership did not have any contractual obligations as of March 31,September 30, 2021, other than the liability for dismantlement and abandonment costs of its oil and gas properties. The Partnership has recorded a separate liability for this asset retirement obligation as discussed in the Notes to the Financial Statements included in the Partnership’s Annualunder Part I, Item I of this Quarterly Report on Form 10-K for the fiscal year ended December 31, 2020.10-Q.

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.

John J. Christmann IV, the Managing Partner’s Chief Executive Officer and President (in his capacity as principal executive officer), and Stephen J. Riney, the Managing Partner’s Executive Vice President and Chief Financial Officer (in his capacity as principal financial officer), evaluated the effectiveness of the Partnership’s disclosure controls and procedures as of March 31,September 30, 2021, the end of the period covered by this report. Based on that evaluation and as of the date of that evaluation, these officers concluded that the Partnership’s disclosure controls and procedures were effective, providing effective means to ensure that the information it is required to disclose under applicable laws and regulations is recorded, processed, summarized and reported within the time periods specified under the SEC’s rules and forms and communicated to the Partnership’s management, including the Managing Partner’s principal executive officer and principal financial officer, to allow timely decisions regarding required disclosure.

There was no change in the Partnership’s internal controls over financial reporting during the period covered by this Quarterly Report on Form 10-Q that materially affected, or is reasonably likely to materially affect, the Partnership’s internal controls over financial reporting.