Sable Offshore loses court battle against California Coastal Commission

SANTA BARBARA - Sable Offshore Corp. (NYSE:SOC), whose shares have declined over 11% in the past week and currently trade at $17.69, announced Wednesday that a tentative ruling by the Santa Barbara Superior Court is expected to deny the company’s claims against the California Coastal Commission. According to InvestingPro data, the company is currently showing signs of financial stress with multiple warning indicators.

The ruling, released on October 14, would have no impact on the potential resumption of petroleum transportation through the Las Flores Pipeline System, according to the company. Oil and gas production from the federal Santa Ynez Unit and petroleum flow to Las Flores Canyon processing facilities would also remain unaffected. With a current ratio of 0.29, InvestingPro analysis indicates the company’s short-term obligations exceed its liquid assets, making operational stability crucial.

Sable plans to appeal if the ruling is adopted after the scheduled October 15 hearing. The company is seeking approximately $347 million in damages, claiming the Commission erroneously issued cease and desist orders during pipeline repairs.

"Although the tentative ruling is disappointing, it has no impact on Sable’s business strategy," said Jim Flores, Chairman and CEO of Sable, in a press release statement.

The company completed anomaly repairs and hydrotesting of the Las Flores Pipeline System in May 2025 in accordance with a Federal Consent Decree. Sable continues to work with California officials to resume petroleum transportation through the pipeline.

If approval delays continue, Sable indicated it may pursue an alternative Offshore Storage & Treating Vessel (OS&T) strategy, which was previously used for Santa Ynez Unit production from 1981 to 1994. The company believes this approach would allow it to refinance its existing term loan.

The Santa Ynez Unit restarted production in May 2025 after being shut in since June 2015. Currently, oil produced is being stored at the Las Flores Canyon processing facility pending resumed pipeline transportation.

In other recent news, Sable Offshore Corp. has made significant strides with its Las Flores Pipeline System by submitting a formal Request for Approval of Restart Plans to California regulators. The company reports that it has fulfilled all operational requirements mandated by the Federal Consent Decree, which includes completing repairs and enhancements. Additionally, Sable Offshore has updated its Development and Production Plan for the Santa Ynez Unit, which now includes offshore processing, storage, and offloading of crude oil. In legal developments, Sable is seeking over $347 million in damages from the California Coastal Commission due to delays caused by a Cease and Desist Order. Benchmark has reiterated its Buy rating and $47.00 price target for Sable Offshore, following the company’s presentation of its "Plan B" involving an offshore storage and treating vessel. These developments reflect Sable Offshore’s ongoing efforts to advance its operational and legal strategies.

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