SOC
Sable Offshore CORP
NYSE
8-K: Sable Offshore Corp. Reports Net Loss of $109.5 Million in First Quarter 2025
Sentiment:
Earnings Release
9 May 2025 4:10 PM
Sable Offshore Corp. announced a net loss of $109.5 million for the first quarter of 2025, primarily due to production restart expenses and non-cash items.
Delay expected
The Santa Ynez Unit assets have been non-producing since June 2015 due to a pipeline shutdown, representing a significant delay in production.
Worse than expected
The company reported a net loss of $109.5 million, indicating worse than expected financial performance.
Summary
- Sable Offshore Corp. reported its first quarter 2025 financial and operational results on May 9, 2025.
- The company announced a net loss of $109.5 million for the quarter ended March 31, 2025.
- This loss is mainly attributed to production restart-related operating expenses, non-cash interest expense, and a non-cash change in the fair value of warrant liabilities.
- As of the end of the quarter, Sable Offshore had 89,338,358 shares of common stock outstanding.
- The company's outstanding debt at the end of the quarter was $854.6 million, including paid-in-kind interest, additional principal from a debt amendment, and debt issuance costs.
- Sable Offshore ended the quarter with $189.0 million in cash and cash equivalents, excluding a restricted cash balance of $35.5 million.
- The company is focused on responsibly developing the Santa Ynez Unit (SYU) in federal waters offshore California.
- The SYU assets have not produced commercial quantities of hydrocarbons since June 2015 due to a pipeline shutdown.
- If restart production is not achieved by March 1, 2026, the terms of the asset acquisition with ExxonMobil Corporation would potentially result in the assets being reverted to ExxonMobil Corporation without any compensation to Sable therefor.
Sentiment
Score: 3
Explanation: The sentiment is negative due to the significant net loss, high debt, and the uncertainty surrounding the restart of production at the Santa Ynez Unit. The risk of asset reversion to ExxonMobil further contributes to the negative outlook.
Positives
- Sable Offshore Corp. ended the quarter with $189.0 million in cash and cash equivalents, excluding a restricted cash balance of $35.5 million.
Negatives
- Sable Offshore Corp. reported a net loss of $109.5 million for Q1 2025.
- Outstanding debt totaled $854.6 million at the end of Q1 2025.
- The Santa Ynez Unit (SYU) assets have been non-producing since June 2015.
- Failure to restart production by March 1, 2026, could result in the assets reverting to ExxonMobil without compensation.
Risks
- The ability to recommence production of the SYU assets and the cost and time required therefor is a risk.
- Global economic conditions and inflation could impact results.
- Increased operating costs could negatively affect profitability.
- Lack of availability of drilling and production equipment, supplies, services and qualified personnel poses a risk.
- Geographical concentration of operations increases vulnerability to local events.
- Environmental and weather risks could disrupt operations.
- Regulatory changes and uncertainties could impact the business.
- Litigation, complaints and/or adverse publicity could harm the company's reputation and financial performance.
- Privacy and data protection laws, privacy or data breaches, or loss of data could result in penalties and reputational damage.
- The company's ability to comply with laws and regulations applicable to its business is a risk.
- If Restart Production is not achieved by March 1, 2026, the terms of the asset acquisition with ExxonMobil Corporation would potentially result in the assets being reverted to ExxonMobil Corporation without any compensation to Sable therefor.
Future Outlook
The press release contains forward-looking statements regarding the recommencement of production at the Santa Ynez Unit and the associated costs and timelines. Actual results may differ materially due to various risks and uncertainties.
Industry Context
The announcement reflects the challenges faced by oil and gas companies in restarting production from previously shut-in assets, particularly in environmentally sensitive areas like offshore California. The financial results highlight the significant costs associated with such projects and the risks involved.
Comparison to Industry Standards
- It is difficult to compare Sable Offshore's results directly to industry standards due to the unique circumstances of the Santa Ynez Unit restart.
- However, other companies undertaking similar offshore production restarts, such as those in the Gulf of Mexico, often face comparable challenges in terms of costs, regulatory hurdles, and operational risks.
- Companies like Fieldwood Energy (prior to its bankruptcy) and W&T Offshore have experience with restarting mature offshore fields, but their specific financial results and operational metrics may not be directly comparable due to differences in field characteristics and regulatory environments.
Stakeholder Impact
- Shareholders are negatively impacted by the net loss and the uncertainty surrounding the Santa Ynez Unit restart.
- Employees' job security could be affected by the company's financial performance and the success of the production restart.
- The local community in California could benefit from the recommencement of production at the Santa Ynez Unit, but environmental concerns remain a key consideration.
- Creditors face increased risk due to the company's high debt levels and the uncertainty surrounding the production restart.
Next Steps
- Sable Offshore needs to obtain the necessary permits to recommence transportation via pipeline and restart production at the Santa Ynez Unit.
- The company must manage its debt and cash flow to fund the production restart and other operational activities.
- Sable Offshore must successfully recommence production of the SYU assets by March 1, 2026, to avoid asset reversion to ExxonMobil.
Key Dates
- June 2015: Santa Ynez Unit assets shut in due to pipeline ceasing operations.
- December 31, 2024: Date of Sable's Annual Report on Form 10-K.
- March 31, 2025: End of the first quarter 2025 reporting period.
- May 9, 2025: Date of the press release announcing Q1 2025 results.
- March 1, 2026: Deadline to restart production to avoid asset reversion to ExxonMobil.
Keywords
Sable Offshore, Financial Results, Operational Results, Net Loss, Santa Ynez Unit, Oil and Gas, Production Restart, Debt, Cash, ExxonMobil
SOC
Sable Offshore CORP
NYSE
Sector: Energy
Filings with Classifications
Better than expected
23 May 2025 4:07 PM
Equity Offering Update
- The offering size was increased from a previously announced $200.0 million of shares, indicating higher demand than initially anticipated.
- The underwriters fully exercised their option to purchase an additional 1,304,346 shares, demonstrating strong investor interest and confidence in the offering.
- The company successfully raised approximately $295.0 million in gross proceeds, providing significant capital for its stated corporate purposes.
Capital raise
23 May 2025 4:07 PM
Equity Offering Update
- Sable Offshore Corp. completed an upsized underwritten public offering of 10,000,000 shares of common stock.
- The shares were sold at a public offering price of $29.50 per share.
- The gross proceeds from the offering amounted to approximately $295.0 million.
- The net proceeds, estimated at $283.2 million, are intended for capital expenditures, working capital, and general corporate purposes.
- The offering included the full exercise of the underwriters' 30-day option to purchase an additional 1,304,346 shares.
Better than expected
19 May 2025 6:19 AM
Current Report on Form 8-K
- The updated 2H25 production guidance of 40,000-50,000 BOE/D is significantly higher than the prior guidance of 20,000-25,000 BOE/D.
- Initial well tests at Harmony Platform have exceeded expectations.
Worse than expected
9 May 2025 4:10 PM
Earnings Release
- The company reported a net loss of $109.5 million, indicating worse than expected financial performance.
Delay expected
9 May 2025 4:10 PM
Earnings Release
- The Santa Ynez Unit assets have been non-producing since June 2015 due to a pipeline shutdown, representing a significant delay in production.
Worse than expected
9 May 2025 4:03 PM
Quarterly Report
- The company reported a net loss of $109.5 million, indicating worse than expected financial performance.
- The company's ability to continue as a going concern is subject to substantial doubt, indicating worse than expected operational outlook.
Delay expected
17 March 2025 8:15 PM
Annual Report
- The company faces regulatory hurdles and legal proceedings that could delay or prevent the restart of production.
Worse than expected
17 March 2025 8:15 PM
Annual Report
- The company has a history of net losses and negative cash flows from operations.
- The company is not currently generating revenue from its SYU Assets.
- The company is reliant on external funding to continue operations.
Worse than expected
19 February 2025 10:14 AM
8-K Filing
- The company is facing a Cease and Desist Order from the California Coastal Commission.
- The company is involved in a lawsuit with the California Coastal Commission.
- The company's pipeline repair operations could be delayed or halted.
Delay expected
19 February 2025 10:14 AM
8-K Filing
- The dispute with the California Coastal Commission could potentially delay Sable's pipeline repair operations.
Delay expected
2 January 2025 7:35 AM
Litigation Update
- The lawsuit and subsequent remand introduce uncertainty regarding the timeline for restarting production at the Santa Ynez Unit.
- The potential for third-party interference could further delay the restart of operations.
Delay expected
14 November 2024 5:20 PM
Quarterly Report and Regulatory Update
- The California Coastal Commission asked Sable to stop all work in the Coastal Zone at the end of September, causing delays in pipeline maintenance and repair.
- The need to agree on an interim work plan with the CCC to fill open excavations is causing further delays.
Worse than expected
14 November 2024 5:20 PM
Quarterly Report and Regulatory Update
- The company reported a significant net loss of $255.6 million, which is worse than expected for a company of this size.
- The ongoing issues with the California Coastal Commission and the potential reversion of assets to ExxonMobil are also worse than expected.
Worse than expected
14 November 2024 4:14 PM
Quarterly Report
- The company reported a significant net loss, driven by high operating expenses and changes in the fair value of warrant liabilities.
- The company's assets are not currently producing, leading to a lack of revenue and substantial operating losses.
- There is substantial doubt about the company's ability to continue as a going concern.
Capital raise
14 November 2024 4:14 PM
Quarterly Report
- The company completed a second private placement of shares, raising $150 million.
- The company received $72.5 million from warrant exercises.
- The company may need to raise additional capital if its cost estimates for restarting production are insufficient.
Capital raise
11 October 2024 5:10 PM
S-1 Filing
- The document details the issuance of 7,500,000 shares of Common Stock in a private placement (Second PIPE Investment) for an aggregate purchase price of $150,000,000.
Capital raise
24 September 2024 5:27 PM
Private Placement Announcement
- Sable Offshore Corp. raised approximately $150 million through a private placement.
- The company issued approximately 7.5 million new shares of common stock to investors.
- The shares were sold at a price of $20.00 per share.
Worse than expected
13 August 2024 4:29 PM
Quarterly Report
- The company reported a significant net loss of $165.4 million, which is worse than expected for a company in the process of restarting production.
Delay expected
13 August 2024 4:29 PM
Quarterly Report
- The company has a new deadline of July 1, 2025, to implement its 2021 Risk Analysis and Implementation Plan, which is a delay from the original timeline.
- The company is facing delays in obtaining permits from the County of Santa Barbara.
Delay expected
13 August 2024 4:07 PM
Quarterly Report
- The company's restart of production is contingent on regulatory approvals and repairs, which introduces uncertainty and potential delays.
- The OSFM approved PPC's extension request for the implementation of the 2021 Plan, setting a new deadline of July 1, 2025.
Worse than expected
13 August 2024 4:07 PM
Quarterly Report
- The company reported a significant net loss of $165.4 million for the quarter and $345.5 million for the period from February 14, 2024 to June 30, 2024.
- Operating expenses were substantial at $62.2 million for the quarter and $221.4 million for the period from February 14, 2024 to June 30, 2024.
- The company recorded a large change in fair value of warrant liabilities of $81.2 million for the quarter and $79.4 million for the period from February 14, 2024 to June 30, 2024.
- There is substantial doubt about the company's ability to continue as a going concern.
Capital raise
13 August 2024 4:07 PM
Quarterly Report
- The company may need to raise additional capital if its cost estimates for restarting production are less than the actual amounts needed.
- There is no assurance that new financing will be available on commercially acceptable terms.
Delay expected
11 July 2024 9:05 AM
Current Report
- The restart of operations has been delayed and is now expected in late third quarter 2024 or early fourth quarter 2024.
Better than expected
15 May 2024 4:54 PM
Quarterly Report
- The company increased its Total Net Estimated Contingent Resources by 21% to 646 MMboe, with a PV-10 value of $10.0 billion, which is a significant improvement over previous estimates.
Worse than expected
15 May 2024 4:38 PM
Quarterly Report
- The company reported a significant net loss of $180.1 million, which is worse than expected for a company that has just completed a business combination and is preparing to restart production.
- The high general and administrative expenses, driven by a $70 million legal settlement and $46.4 million in share-based compensation, contributed to the worse than expected results.
Capital raise
15 May 2024 4:38 PM
Quarterly Report
- The company raised $440.2 million through a private placement of common stock.
- The company secured a $625 million senior secured term loan from Exxon Mobil.
Delay expected
1 April 2024 4:31 PM
Amended 8-K Filing
- The closing date of the purchase agreement was delayed from June 30, 2022, to December 31, 2022, and then to February 1, 2024, and finally closed on February 14, 2024.
- The restart of production is contingent upon regulatory approvals and the timing of ongoing construction repair efforts, which could lead to further delays.
Capital raise
1 April 2024 4:31 PM
Amended 8-K Filing
- The company raised $440.2 million through a private placement of shares at $10.00 per share.
- The company may need to raise additional capital if the costs of restarting production exceed estimates.
Worse than expected
1 April 2024 4:31 PM
Amended 8-K Filing
- The company reported a significant net loss of $1.5 billion in 2022 due to a $1.4 billion impairment, indicating worse than expected financial performance.
- The company has a going concern warning, indicating worse than expected financial stability.
Capital raise
28 March 2024 5:21 PM
Annual Report
- The company may need to raise additional capital to fund the restart of production if its current cash on hand is insufficient.
- The company may issue additional equity or debt securities in the future, which may dilute existing stockholders or introduce restrictive covenants.
Worse than expected
28 March 2024 5:21 PM
Annual Report
- The company's independent auditor has expressed substantial doubt about its ability to continue as a going concern.
- The company has a working capital deficit of $16.4 million as of December 31, 2023.
Capital raise
12 February 2024 5:30 PM
Merger Announcement
- The company initially secured a $520 million PIPE investment.
- One investor was unable to fund $125 million of their commitment.
- The company secured an additional $53 million in PIPE investments to partially offset the shortfall.
- The company will continue to seek additional investments to provide liquidity after the merger.
Capital raise
16 January 2024 4:26 PM
Merger Financing Update
- Flame Acquisition Corp. has secured $520 million in PIPE financing.
- The financing involves the sale of 52 million shares of Class A common stock at $10.00 per share.
- The PIPE includes $100 million from new Flame PIPE investors and $420 million from Holdco PIPE investors.
- The Holdco PIPE investors will purchase 34.85 million shares of Holdco Class B shares at $10.00 per share.
Disclaimer: This summary was generated by artificial intelligence and its accuracy is not guaranteed. The information provided here is for general informational purposes only and does not constitute financial advice, recommendation, or endorsement of any kind. It may contain errors or omissions. You should not rely on this information to make financial decisions. Always seek the advice of a qualified financial professional before making any investment or financial decisions. Use of this information is at your own risk.