How are energy investors positioned?
On Thursday, Roth/MKM initiated coverage of Sable Offshore Corp. (NYSE: SOC) with a Buy rating and set a price target of $30.00. Currently trading at $26.17 with a market capitalization of $2.34 billion, Sable Offshore is an offshore exploration and production company operating in federal waters off the California coast. The company has complete ownership of the Santa Ynez Unit (SYU), which was originally developed by Exxon (NYSE:XOM) over four decades ago. InvestingPro data shows the stock has delivered an impressive 135% return over the past year.
Production at SYU was halted in 2015 following a pipeline leak and has not resumed since. Sable Offshore has announced plans to restart operations in the second quarter of 2025. While the company is not currently profitable, its strong liquidity position with a current ratio of 2.94 provides financial flexibility for the restart. The unit encompasses 76,000 acres and consists of three platforms situated between 5 to 9 miles off the Santa Barbara coast in depths ranging from 900 to 1,200 feet, along with the necessary oil and gas processing infrastructure.
The Santa Ynez Unit includes 112 wells, and according to Sable Offshore, there are over 100 new drilling opportunities available. The company’s significant interest in this area underscores its potential for future development and production.
The analyst from Roth/MKM highlighted the company’s promising prospects, given the extensive acreage and numerous drilling opportunities. The endorsement from Roth/MKM with a Buy rating reflects a positive outlook for the company’s stock as it prepares to recommence production at SYU.
In other recent news, Sable Offshore Corp. has announced several key developments that are likely to interest investors. The company reported a slight increase in its cash balance, which rose to $300 million from $288 million in the previous quarter. Additionally, Sable Offshore has received an extension on its deadline to restart operations, now set for March 1, 2026, giving it more time to resume production. In a significant regulatory development, Sable Offshore received clearance from the Santa Barbara County Planning and Development Department to proceed with repair work on the Las Flores Pipeline System. This clearance, along with the U.S. Department of Transportation’s non-objection to enhanced integrity standards, suggests progress in addressing pipeline anomalies. Benchmark has maintained its Buy rating on Sable Offshore stock, with a price target of $37, following these updates. The company has also adjusted its capital expenditure to align with a revised production timeline, now expected to begin in the second quarter of 2025. These developments indicate Sable Offshore’s ongoing efforts to resume production and maintain regulatory compliance.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.