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On Wednesday, Benchmark analysts maintained a Buy rating and a $37.00 price target for Sable Offshore Corp. (NYSE: SOC), expressing confidence in the company’s timeline for production at the Santa Ynez Unit. Currently trading at $20.14, the stock has shown remarkable strength with an 81.21% return over the past year. The company anticipates a May start-up and expects to initiate sales in June.
Sable Offshore’s CEO & Chairman, Jim Flores, discussed the remaining steps to reach first production. While not all challenges are expected to be overcome by the start-up, the majority are anticipated to be addressed post-production. The two critical pre-production requirements include acquiring the right-of-entry from Parks & Wildlife and receiving approval from the Office of the State Fire Marshal (OSFM) for the restart plan.
Upon obtaining the right-of-entry, which Sable Offshore expects to receive promptly, the company will be able to complete the remaining anomaly repairs and hydrotest. This will set the stage for OSFM to authorize the restart. The staggered commencement of offshore production is planned for late-May across the Harmony (JO:HARJ), Heritage, and Hondo platforms, with the first oil sales slated for June and a full quarter of production expected in the third quarter.
The ongoing litigation with the California Coastal Commission is among the issues to be resolved post-production. While currently unprofitable, InvestingPro analysis indicates analysts expect the company to achieve profitability in 2025, with a forecasted EPS of $0.64. The absence of the California Coastal Commission from the Consent Decree has been noted as an indicator of the agency’s limited primary jurisdiction. Despite facing obstacles, Sable Offshore has progressed with safety valve installations, anomaly repairs, and hydrotesting.
The Central Water Quality Control Board has scheduled a public hearing for April 17-18, with Sable Offshore included on the agenda. The company is also addressing outstanding issues with the State Lands Commission, Fish & Wildlife, and third-party litigation.
In other recent news, Sable Offshore Corp. has made several notable announcements affecting its operations and financial outlook. The company reported an increase in its cash balance to $300 million, up from $288 million, and projected expenses of $152 million to restart production. Sable Offshore received an extension to resume operations, now set for March 1, 2026, delaying from the previous January 1, 2026 deadline. This extension provides additional time to address operational challenges. Additionally, the Santa Barbara County Planning and Development Department authorized repair work on the Las Flores Pipeline System, a crucial step for maintaining infrastructure integrity.
Benchmark analysts maintained a Buy rating for Sable Offshore with a $37 price target, expressing confidence in the company’s prospects despite regulatory challenges from the California Coastal Commission. Roth/MKM also initiated coverage with a Buy rating and a $30 price target, citing the extensive drilling opportunities at the Santa Ynez Unit. The clearance for pipeline repairs, backed by the U.S. Department of Transportation, has been positively received, potentially reducing operational risks. These developments underscore the significance of regulatory approvals and financial planning in Sable Offshore’s strategic operations.
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