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Sable Offshore Corp. (SOC)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 was non-operational (no sales) with a net loss of $109.5M, driven by production restart operating expenses, non-cash interest, and the non-cash fair value change of warrant liabilities .
  • Liquidity stepped down as restart spending ramped: cash fell to $189.0M vs $300.4M in Q4 and $288.2M in Q3; total debt rose to $854.6M vs $833.5M (Q4) and $814.4M (Q3) .
  • Against S&P Global consensus, EPS missed (actual −$1.05 vs −$0.43 est) and EBITDA missed (−$53.3M vs $0 est), consistent with continued pre-sales operations; revenue was expected and effectively modeled at $0 [Values retrieved from S&P Global].
  • Key upcoming catalyst: Onshore Pipeline restart and commencement of oil sales in September 2025 (following May restart of production and hydrotests completion), potentially transitioning the story from restart to cash generation .

What Went Well and What Went Wrong

What Went Well

  • Regulatory milestones continued: prior quarter approvals on pipeline integrity standards by California OSFM and hydrotesting plan positioned restart activities, enabling Q2 confirmations and hydrotests completion .
  • Execution progress: workforce on-boarded (100 direct, ~400 contractors), extensive integrity and safety campaigns completed at facilities and platforms in Q3 2024, foundational to restart .
  • CEO reiterated confidence and strategic intent: “The Sable team looks forward to finishing the restoration of the Pipeline to as-new condition and restarting production... The restart will provide low carbon intensity energy to California...” — Jim Flores, Chairman & CEO .

What Went Wrong

  • Financials remained pressured pre-sales: Q1 2025 net loss of $109.5M, reflecting restart operating expenses, non-cash interest, and warrant liability fair value changes .
  • Liquidity draw: cash fell to $189.0M from $300.4M in Q4 and $288.2M in Q3 as restart costs advanced; debt climbed to $854.6M (Q1) vs $833.5M (Q4) and $814.4M (Q3) .
  • Timeline slippage on monetization: while production restarted in May, the company guided to recommence sales upon pipeline restart in September 2025, pushing cash inflow timing later than earlier second-quarter restart expectations .

Financial Results

Headline Metrics (Quarterly Comparison)

MetricQ3 2024Q4 2024Q1 2025
Net Income ($USD Millions)-$255.6 -$16.2*-$109.5
Diluted EPS ($USD)-$4.11*-$0.19*-$1.30*
EBITDA ($USD Millions)-$51.9*-$51.0*-$53.3*
Revenues ($USD Millions)$0.0*$0.0*$0.0*
Cash and Equivalents ($USD Millions)$288.2 $300.4 $189.0
Total Debt ($USD Millions)$814.4 $833.5 $854.6
Shares Outstanding (Millions)78.79 89.31 89.34

Values with asterisk (*) retrieved from S&P Global.

Q1 2025 vs S&P Global Consensus

MetricConsensusActual
Primary EPS ($USD)-0.425-1.045
Revenue ($USD Millions)0.00—
EBITDA ($USD Millions)0.00-53.3

Values retrieved from S&P Global.

Notes:

  • Company did not disclose Q1 revenue; operations were pre-sales due to pipeline restart sequencing .
  • EPS actual and EBITDA actual from S&P Global reflect non-GAAP/operating measures aligned to pre-sales restart stage [Values retrieved from S&P Global].

Segment Breakdown

  • Not applicable; company is focused on the Santa Ynez Unit with integrated Las Flores Canyon processing facilities .

KPIs (Operational Readiness)

  • Pipeline integrity standards approved by OSFM (Dec 19, 2024) .
  • Hydrotests completed on all Onshore Pipeline segments (May 28, 2025) .
  • Restart of production at SYU announced (May 15, 2025) .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Net Average Daily Production (BOE/D)2H 202520,000–25,000 20,000–25,000 (no change communicated in Q1/Q2 materials)Maintained
Facilities Capex ($MM)2H 2025$50–$60 $50–$60 (no change communicated)Maintained
Workover Capex ($MM)2H 2025$20–$30 $20–$30 (no change communicated)Maintained
Total Capex ($MM)2H 2025$70–$90 $70–$90 (no change communicated)Maintained
Oil Sales Timing (Onshore Pipeline restart)3Q 2025Production restart targeted 2Q 2025 Oil sales to recommence upon Onshore Pipeline restart in September 2025 Delayed monetization (sales) to Sep

Earnings Call Themes & Trends

Note: No Q1 2025 earnings call transcript was available for review; themes are synthesized from 8-Ks and company press materials.

TopicQ3 2024 (Previous-2)Q4 2024 (Previous-1)Q1 2025 (Current)Trend
Pipeline integrity & approvalsOSFM approval trajectory; safety valve settlement; anomaly repairs (~100 repaired) OSFM approved enhanced standards; PHMSA non-objection; hydrotest planning Pre-sales quarter; progress affirmed; sets stage for hydrotests and restart in Q2 Improving regulatory readiness
Production restart timingBuilding to restart; workforce and facility readiness Expected restart in 2Q 2025 Still pre-sales; restart achieved in May (disclosed Q2), sales slated for Sep Operational restart achieved; monetization next
Legal/regulatory coordinationCounty jurisdiction settlement; CCC coordination update Continued multi-agency engagement (OSFM, PHMSA, County) Ongoing in background; no new Q1 disclosures beyond readiness Active but de-risking
Capital structure & liquidityWarrant redemptions, PIPE; cash to $288M Cash $300M; enterprise value framework, refinance intent, hedging, dividend plan Cash down to $189M; debt up $854.6M pre-sales Liquidity consumption ahead of sales
Shareholder returns programAnnounced intent (dividends/buybacks post-restart) Reinforced financial objectives Execution contingent on oil sales commencement Dependent on sales start

Management Commentary

  • “The Sable team looks forward to finishing the restoration of the Pipeline to as-new condition and restarting production at the Santa Ynez Unit. The restart will provide low carbon intensity energy to California and enhance domestic energy security and affordability.” — Jim Flores, Chairman & CEO .
  • “Sable and the CCC are now working to agree on the terms of an interim work plan to fill the open excavations... Restoring the excavations to their original condition will be the best way to ensure that the environment will be protected...” — Steve Rusch, VP Regulatory & Environmental Affairs .

Strategic messages:

  • Emphasis on regulatory compliance and environmental stewardship (OSFM approvals, CCC coordination) .
  • Intent to optimize capital structure, implement hedging, and institute dividends/buybacks post-restart .
  • Clear sequencing: complete repairs and hydrotests → restart production (May) → restart pipeline and commence oil sales (September) .

Q&A Highlights

  • No Q1 2025 earnings call transcript identified; Q&A topics and clarifications are unavailable from primary sources [ListDocuments returned none].

Estimates Context

  • EPS: Miss. Actual −$1.045 vs consensus −$0.425; non-cash items (warrant liability fair value, non-cash interest) and restart Opex weighed on results [Values retrieved from S&P Global] .
  • EBITDA: Miss. Actual −$53.3M vs consensus $0.0; consistent with pre-sales operating stage [Values retrieved from S&P Global].
  • Revenue: Consensus $0.0; company did not disclose Q1 revenue; operations were pre-sales given Onshore Pipeline restart sequencing [Values retrieved from S&P Global] .

Where estimates may need to adjust:

  • Near-term models should reflect September oil sales start and limited monetization in Q2, with potential inventory build pre-sales (production flowing to storage) .
  • Transition to positive EBITDA hinges on sales commencement and Brent-linked offtake; pre-sales quarters should retain operating losses and restart costs.

Key Takeaways for Investors

  • Pre-sales quarter delivered expected losses as restart spending continued; cash declined and debt increased, but regulatory milestones de-risked restart execution .
  • The pivotal catalyst is September 2025 oil sales commencement following May production restart and hydrotests completion; this should begin converting resource into cash flow .
  • Watch capital allocation ramp: hedging, refinancing, and a contemplated dividend/buyback framework post-sales could drive equity narratives .
  • Earnings normalization depends on offtake timing and pipeline uptime; any delay to September sales would be a negative variance vs current expectations .
  • Non-cash volatility (warrant liability fair value changes) materially impacted GAAP net income; focus on operating cash metrics post-sales start for clearer performance read-through .
  • Regulatory posture is constructive (OSFM, PHMSA, County), and CCC coordination continues; regulatory developments remain a stock driver .
  • Near-term trading: stock likely keying on confirmations of pipeline restart schedule, first oil sales, and any updates on shareholder returns and refinancing execution .

Footnote: Values with asterisk (*) retrieved from S&P Global.