Sable Offshore (NYSE:SOC) is pursuing a bulk crude sale and other financing options to address a fourth-quarter cash shortfall after disruptions to sales from its Santa Ynez Unit, executives said on the company’s third-quarter 2026 earnings call.
Chairman and Chief Executive Officer Jim Flores said Sable’s sole crude purchaser began reducing purchases in early October. After about two and a half weeks without purchases, Sable approached three other Los Angeles-area refineries. The company has since signed sales agreements with all three, and all four refineries are now taking its crude, he said.
The sales disruption followed a third quarter in which Sable increased volumes sold nearly 30% from the prior quarter and revenue grew 13%, according to Harrison Breaud, vice president of finance and investor relations. The period was Sable’s second full quarter of oil sales.
Bulk Sale and Financing Options
Flores said Sable was in discussions with more than half a dozen potential buyers for a bulk sale of up to 1.3 million barrels, with a lump-sum payment targeted for November and deliveries on an agreed schedule. The company expected term sheets as early as the week of the call.
The available crude includes oil in storage tanks and pipelines, Flores said. A buyer would take title to the crude while Sable continued to provide storage and transportation services. He said the purchaser would receive a discount and that the company was seeking to replace revenue lost when October sales fell short of expectations.
Chief Financial Officer Gregory Patrinely said Sable expects fourth-quarter cash spending of approximately $110 million to $120 million on operating expenses, general and administrative costs, and capital expenditures. Including roughly $53 million of debt amortization and interest due Dec. 31, total expected spending is about $165 million to $175 million.
Patrinely said the company had approximately $38 million in cash and expects revenue from November sales, alongside a potential bulk-sale payment, to help cover the gap. Sable is also working with JPMorgan on potential use of a $100 million unsecured borrowing basket permitted under its senior secured term loan. If needed, it could pursue a private investment in public equity, or PIPE, Flores said.
Breaud said Sable used its at-the-market equity program during the third quarter to bolster working capital but had not used it so far in the fourth quarter. He said the company could not comment on potential future use of the program.
Hondo Restart and Sales Capacity
Sable completed reconstruction and internal commissioning work at Platform Hondo during the third quarter and submitted final paperwork to the Marine Minerals Administration, Flores said. An in-person safety inspection and production restart were scheduled for November, with all 15 producing wells targeted to flow to sales in December.
Flores said the company was scheduled to begin flowing Hondo wells on the Monday after Thanksgiving, subject to the regulatory process. He also said Sable wanted production data from the wells for its year-end reserve report.
For transportation, Sable has 45,000 barrels per day of firm capacity on Line 2000, Flores said. An additional 10,000 to 15,000 barrels per day could potentially move on Line M70 to PBF, although that arrangement had not been confirmed.
Flores said the three new refinery agreements began at starter volumes. November pricing differentials averaged approximately what Sable had received from its existing purchaser, Chevron, he said. The company is seeking longer-term contracts that could improve pricing, but Flores cautioned that the heavy crude market has ample supply and that Sable is currently focused on volumes.
Production and Reserve Outlook
Breaud said existing wells at Platforms Harmony and Heritage were showing little to no production decline. PERF-ADD operations had added an average observed rate of more than 700 barrels per day per operation, at the upper end of management’s expectations, he said.
Flores said Sable believes its approach to managing gas and reservoir pressure could eventually increase recovery and reduce decline rates, but indicated that third-party engineers would need time to assess the strategy. The company aims to have its 3P reserves audited by Netherland, Sewell by the end of 2027, he said.
About Sable Offshore (NYSE:SOC)
Sable Offshore Corp. is an independent energy company focused on developing and operating oil and natural gas assets offshore California. Its principal asset is the Santa Ynez Unit, a mature offshore field in the Santa Barbara Channel that includes offshore production platforms, subsea infrastructure, pipelines and the Las Flores Canyon processing facility onshore.
The company’s operations are designed to produce and process crude oil, natural gas and associated hydrocarbons from the Santa Ynez Unit.
