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SO

Sable Offshore Corp. (SOC)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 was another transition quarter with operations focused on pipeline restart; the company reported a net loss of $128.1 million as restart-related costs and non‑cash items outweighed limited pre‑sales production activity .
  • Guidance shifted: management now expects recommencement of oil sales upon Onshore Pipeline restart in September 2025, versus the earlier August 1 target after court-ordered TROs delayed June/July timing .
  • Consensus context: SOC materially missed Wall Street estimates on EPS and EBITDA, reflecting higher restart costs and no revenue in the quarter; EPS actual −$1.70 vs consensus −$0.62, EBITDA −$125.7MM vs −$22.8MM* (S&P Global)
  • Operationally, hydrotests of all onshore pipeline segments were completed in May, satisfying the final operational condition for restart; ~130,000 barrels flowed from Platform Harmony into storage during Q2 .
  • Capital position improved via an upsized equity offering ($282.6MM net) on May 23; quarter-end cash $247.1MM, debt $875.6MM, and 99.48MM shares outstanding, providing runway to the targeted September sales restart .

What Went Well and What Went Wrong

What Went Well

  • Completed hydrotests for all Onshore Pipeline segments, meeting the final operational condition for restart (“no more repairs are required”) .
  • Restarted production at the Santa Ynez Unit and began flowing oil to Las Flores Canyon; ~130,000 bbl moved into storage in Q2, with additional ~220,000 bbl through August 8 (post-quarter) .
  • Strengthened liquidity with $282.6MM net proceeds from an upsized 10,000,000-share offering at $29.50 per share, bolstering funding for restart and development .

What Went Wrong

  • Legal setbacks: Santa Barbara County Superior Court granted TROs prohibiting pipeline restart pending a July hearing, pushing targeted first sales to August 1, later updated to September restart for oil sales .
  • Financial results reflected elevated restart-related operating expenses and non‑cash interest expense, driving a net loss of $128.1MM for the quarter .
  • Revenues were not reported and margins are not meaningful without sales; consensus expected zero revenue, highlighting limited ability to offset restart costs in Q2* (S&P Global).

Financial Results

MetricQ4 2024Q1 2025Q2 2025
Net Income ($USD Millions)−$617.3 −$109.5 −$128.1
Diluted EPS (USD)N/A*−$1.297*−$1.404*
EBITDA ($USD Millions)N/A*−$53.34*−$125.72*
Revenues ($USD Millions)N/A*N/A*N/A*
EBITDA Margin (%)N/A*N/A*N/A*
Gross Profit Margin (%)N/A*N/A*N/A*

Values marked with * retrieved from S&P Global.

Q2 2025 Actual vs Wall Street Consensus (S&P Global):

MetricConsensusActualBeat/Miss
EPS (USD)−$0.6225*−$1.7014*Miss
EBITDA ($USD Millions)−$22.75*−$125.716*Miss
Revenue ($USD Millions)$0.00*N/A*N/A

Values retrieved from S&P Global.

KPIs and Balance Sheet Snapshot:

KPIQ4 2024Q1 2025Q2 2025
Oil flowed into storage (bbl)N/AN/A~130,000
Equity offering proceeds (net)N/AN/A$282.6MM
Shares outstanding (end of period)89,311,0k 89,338,358 99,482,250
Cash & Equivalents ($MM)$300.4 $189.0 $247.1
Restricted Cash ($MM)$35.4 $35.5 $35.6
Outstanding Debt ($MM)$833.5 $854.6 $875.6 (short-term, incl. PIK and amendment-related)

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
First oil sales (Onshore Pipeline restart)2H25Targeted Aug 1, 2025 (post-TRO update) September 2025 Lowered (delayed)
Net Avg Daily Production (BOE/D)2H2520,000–25,000 20,000–25,000 (no update provided in Q2 release) Maintained
Facilities Capex ($MM)2H25$50–$60 $50–$60 (no update provided in Q2 release) Maintained
Workover Capex ($MM)2H25$20–$30 $20–$30 (no update provided in Q2 release) Maintained
Total Capex ($MM)2H25$70–$90 $70–$90 (no update provided in Q2 release) Maintained
Workovers (#)2H255–7 5–7 (no update provided in Q2 release) Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024 and Q1 2025)Current Period (Q2 2025)Trend
Pipeline integrity and hydrotestsOSFM approved enhanced integrity standards; hydrotesting initiated Hydrotests of all segments completed; final condition met; “no more repairs required” Positive operational progress
Regulatory/legal actionsPermitting steps affirmed; approvals by PHMSA/OSFM; coastal zone repair authorization TROs prohibit restart pending July hearing; shifted first sales timing Negative legal overhang
Production restart timelineTarget Q2 2025 restart; sequential platform restart (Harmony → Heritage → Hondo) SYU wells on Harmony producing; storage build; oil sales expected upon pipeline restart in September Slightly delayed vs plan
Capital markets/liquidityYE cash $300.4MM; debt $833.5MM Upsized equity offering net $282.6MM; Q2 cash $247.1MM; debt $875.6MM Liquidity strengthened
CCS and long-term strategyEvaluating CCS leveraging infrastructure; deep inventory and shallow declines No new CCS update in Q2 releaseStable narrative

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 .
  • Q2 release emphasized operational milestones (restart of SYU production, completion of anomaly repair program, successful hydrotests) and liquidity measures (equity offering net proceeds $282.6MM), while acknowledging restart-related expenses and non‑cash interest expense impacting results .

Q&A Highlights

  • Earnings call transcript for Q2 2025 was not available in the document catalog; therefore, Q&A themes, guidance clarifications, and tone shifts from live remarks are unavailable in this recap.

Estimates Context

  • SOC materially missed consensus for EPS and EBITDA given restart-related costs and absence of sales in Q2: EPS actual −$1.7014 vs −$0.6225 consensus; EBITDA −$125.716MM vs −$22.75MM consensus* (S&P Global).
  • Revenue consensus was $0.00 for Q2; actual revenue was not reported and is not available via filings or SPGI fundamentals for the quarter* (S&P Global).
  • Implication: Street estimates likely need to incorporate higher restart Opex, legal timing risk on pipeline restart, and the sequencing from storage build to sales commencement beginning in September.

Values retrieved from S&P Global.

Key Takeaways for Investors

  • Legal timing drove the quarter: TRO-driven delays shifted first sales to September; monitor resolution of injunctions and regulatory approvals for the Onshore Pipeline restart .
  • Operational execution remains strong: anomaly repairs complete, hydrotests done, Harmony wells producing into storage; “no more repairs required” signals readiness to sell upon restart .
  • Liquidity bolstered: $282.6MM net equity raise in May supports restart and early development activities; quarter-end cash $247.1MM vs short-term debt $875.6MM .
  • Expect near-term earnings volatility: no revenues and elevated restart Opex/non‑cash interest drove Q2 losses; consensus misses underline transition nature of pre‑sales quarters* (S&P Global) .
  • Guidance largely maintained for 2H25 production/capex; the key change is timing of first sales to September — watch execution vs this milestone .
  • Trading setup: catalysts include formal restart, first oil sales, and any legal/regulatory resolutions; risks center on further delays and cost escalation .
  • Medium-term thesis: once sales commence, shallow decline profile and existing infrastructure could support cash generation and shareholder returns per prior strategy, subject to legal outcomes and commodity pricing .