Executive Summary

Q2 2024 delivered a net loss of $165.4M driven by a non-cash change in fair value of warrant liabilities, production-restart related operating expenses, and share-based compensation; the company reported no revenue as SYU assets remain non-producing pending pipeline restart .
EPS was -$2.75 vs a third-party reported consensus of -$0.39, a significant miss; S&P Global consensus data was unavailable for FLME/SOC mapping at the time of query .
Operational progress was tangible: final approvals for ownership and operatorship of SYU, over 3,000 safety device tests, contractor mobilization (>200), and submission of pipeline restart plans; OSFM extended the deadline to implement the 2021 risk plan to July 1, 2025 .
Near-term stock narrative hinges on regulatory milestones enabling pipeline restart and commencement of production/sales, alongside clarity on restart costs and timing; prior 4Q24 production/cost guidance was reiterated earlier (Q1 PR) and not updated in Q2 .

What Went Well and What Went Wrong

What Went Well

Received final approval for assignment of ownership and operatorship of SYU from BOEM and BSEE, de-risking operatorship transition ahead of restart .
Execution momentum: completed >3,000 safety device tests, conducted pipeline integrity surveys, initiated emissions reduction equipment installations and compressor overhauls, and staffed >200 contractors to prepare facilities and pipelines .
Regulatory progress: OSFM reaffirmed the 2021 Risk Analysis and Implementation Plan as compliant with AB 864, and approved Sable’s request to extend implementation to July 1, 2025, providing timing certainty for required upgrades .
- “Sable met its 60-day advanced notice requirement to submit its production restart plans for the Pipelines to the OSFM for review and approval” .

What Went Wrong

Large net loss (-$165.4M) primarily from non-cash warrant liability fair value change, restart-related costs, and SBC; no revenue recognized due to non-producing assets status .
Cash declined to $112.1M from $209.1M in Q1 while debt increased to $790.4M (incl. PIK and issuance costs), tightening financial flexibility pre-restart .
Continued dependency on regulatory approvals and permit resolutions (e.g., County of Santa Barbara safety valves permits under the 2021 Plan) introduces execution risk to restart timeline .

Financial Results

Metric	Q1 2024	Q2 2024
Revenue ($USD Millions)	NR	$0.0 (no revenue reported)
Net Income ($USD Millions)	-$180.1	-$165.4
Diluted EPS (Continuing Ops) ($)	NR	-$2.75
EBITDA ($USD Millions)	NR	NR
Cash and Cash Equivalents ($USD Millions)	$209.1	$112.1
Total Debt ($USD Millions)	$771.2	$790.4
Shares Outstanding (Millions)	NR (disclosed post-PIPE funding, not exact shares in Q1 PR)	64.845 (incl. 4.679 RSAs)

Notes:

“NR” indicates not reported in the referenced press release.
Margins are not meaningful in Q2 given no recognized revenue .

Segment/KPIs

KPI	Q1 2024	Q2 2024
SYU operatorship/ownership approvals	In process with BOEM/BSEE	Final approvals received
Pipeline restart regulatory steps	AB-864 enhanced risk plan filed Apr 11; restart notice submitted in Q1 for Sept 2024	60-day advance restart plan submission met (July 29); OSFM extended 2021 Plan deadline to July 1, 2025
Safety device tests completed	NR	>3,000
Staffing additions	+72 (48 ex-EM + 24 new by May 15)	+13 employees; >200 contractors staffed

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Net Avg Daily Production (BOE/D)	4Q24	23,000 – 28,000	No update provided in Q2 PR	Maintained (no change)
Lease Operating Expense ($/BOE)	4Q24	$17.00 – $19.00	No update provided in Q2 PR	Maintained
GPT ($/BOE)	4Q24	$2.50 – $3.50	No update provided in Q2 PR	Maintained
Cash G&A ($/BOE)	4Q24	$4.50 – $5.50	No update provided in Q2 PR	Maintained
Severance & Ad Valorem Taxes (% of revenue)	4Q24	0.5% – 1.0%	No update provided in Q2 PR	Maintained
Restart timing (SYU)	3Q24 (Sept)	Restart expected Sept 2024	Q2 PR reaffirms regulatory steps; timing not explicitly restated	No explicit update
AB-864 2021 Plan implementation deadline	N/A	Prior deadline not specified	Extended to July 1, 2025	Extended

Earnings Call Themes & Trends

No Q2 2024 earnings call transcript was found in company filings or our document tools for FLME/SOC. Themes below reflect press-release narratives.

Topic	Previous Mentions (Q1 2024)	Current Period (Q2 2024)	Trend
Regulatory approvals (BOEM/BSEE)	Working towards approval of assignment of ownership/operator	Final approval received	Positive progression
Pipeline integrity & AB-864 plan	Enhanced AB-864 plan filed; settlement to facilitate repairs; restart Sept 2024 targeted	OSFM reaffirmed 2021 Plan; deadline extended to 7/1/2025; restart plan submitted	Framework solidified; timeline extended for implementation
Restart readiness (facilities, staffing)	Maintenance/repairs initiated; hiring underway	>3,000 safety tests; emissions/compressor work; +13 employees; >200 contractors	Accelerating execution
Contingent resources & PV-10	Updated to 646 MMboe; PV-10 $10.0B	No new update in Q2 PR	Stable
CCUS initiative	Planning/permitting initiated	No new update in Q2 PR	Neutral

Management Commentary

“After closing the acquisition of the Santa Ynez Unit and completing our Business Combination transaction, the Sable team has continued working tirelessly to unlock the value of our assets… we now estimate Total Net Estimated Contingent Resources of 646 MMboe and a PV-10 value of $10.0 billion…” — Jim Flores, Chairman & CEO (Q1 PR) .
“Sable is currently contracting repair crews… initiated maintenance, construction, and repairs at the Las Flores Canyon Processing Facility and offshore platforms Harmony, Hondo, and Heritage… working closely with BOEM and BSEE towards approval… submitted our September 2024 Pipeline 324/325 restart notification… filed an enhanced AB-864 Risk Analysis and Implementation Plan…” — Jim Flores (Q1 PR) .

Q&A Highlights

No Q2 2024 earnings call transcript or Q&A was available in our document set for FLME/SOC; therefore, no Q&A highlights can be provided for this quarter. We searched for and could not locate a Q2 2024 call transcript in company filings or repository tools [ListDocuments (earnings-call-transcript): no results].

Estimates Context

S&P Global consensus data was unavailable due to missing FLME/SOC mapping and request limits; therefore, we cannot provide SPGI-based consensus figures at this time.
Third-party source indicates Q2 2024 EPS of -$2.75 vs consensus -$0.39, with no revenue reported, implying a significant miss; use caution as this is not SPGI data .
Given non-cash warrant fair value impacts and restart expenses, analysts may need to recalibrate near-term EPS/EBITDA paths to reflect timing of production/sales commencement and regulatory run-rate costs .

Key Takeaways for Investors

Execution and regulatory milestones are the primary near-term catalysts; final operatorship approvals and OSFM actions de-risk restart steps, but the extended 2021 Plan deadline to July 1, 2025 adds an implementation window that investors must track .
Liquidity declined Q/Q (cash $112.1M) while debt rose ($790.4M); monitor working capital needs and potential financing ahead of production/sales ramp .
The large Q2 net loss was driven by non-cash warrant liability fair value changes and restart-related costs; these may distort EPS until revenue begins, affecting sentiment vs. estimates .
4Q24 production and cash-cost guidance previously provided was not updated in Q2; watch for confirmation/updates tied to pipeline readiness and facility commissioning .
Operational readiness continues to improve (3,000+ safety tests, contractor mobilization, equipment upgrades); this supports a sequential restart plan once final approvals are in hand .
The contingent resource base (646 MMboe; PV-10 $10.0B at April 2024 SEC pricing) underscores long-term asset value, contingent on successful restart and sustained operations .
Trading implications: near-term moves likely tied to any announcements on OSFM approvals, pipeline integrity/hydrotest milestones, and any update to restart timing or cost profile; downside risk persists if permit timelines slip or additional capital is needed .

Sources:

Q2 2024 8-K press release (Exhibit 99.1) including financial/operational highlights and regulatory updates .
Q2 2024 8-K filing metadata .
Q1 2024 8-K press release (Exhibit 99.1) with financial highlights, contingent resource update, and 4Q24 guidance .
InvestorPlace report on Q2 2024 EPS and revenue (no revenue reported) .

Sable Offshore Corp. (FLME)·Q2 2024 Earnings Summary