Executive Summary

Q3 showed ongoing pre-revenue operations and a sizeable net loss as the company pivots from a delayed California pipeline restart to a federally permitted OS&T solution; net loss was $110.4M as restart-related OpEx and non-cash interest outweighed a non-cash warrant liability gain .
Management formally prioritized OS&T, targeting vessel purchase in Q1 2026 and first oil sales in Q4 2026; OS&T is expected to lower costs by roughly $10/BOE vs the onshore pipeline pathway due to lower LOE and better marketing optionality .
Balance sheet/timing pressure is elevated near term: amendment of the Exxon term loan requires $225M of common equity to extend maturity (to Mar 31, 2027 or 90 days post first sales) and increases PIK interest to 15% with a $25M minimum cash covenant; mgmt targets ~$25M/month cash burn (ex capex) until first sales .
EPS missed consensus as losses persisted with no commercial sales; the strategic pivot, financing path (debt + equity) and permitting cadence are the key stock catalysts into 2026, along with any clarity on OSFM disputes and federal approvals .

What Went Well and What Went Wrong

What Went Well

OS&T pivot accelerates path to monetization with structural cost advantages: “initial projections show a potential cost savings of approximately $10 per barrel compared to the estimated cost associated with operating the onshore infrastructure” .
Federal process momentum: Management cited proactive engagement with BOEM/BSEE and coordination with Commerce on CZMA issues; goal is to secure clearances to proceed and line up project financing as early as January .
Term loan amendment and roadmap: Company outlined a comprehensive refinancing to take out the Exxon term loan, fund OS&T capex and operating burn through first sales; plan anticipates federal credit support to improve economics .

What Went Wrong

No commercial sales and EPS miss: With continued absence of revenue, EPS missed S&P Global consensus as operating and non-cash interest costs persisted (see Estimates Context). Values retrieved from S&P Global.
California pipeline restart delayed amid OSFM dispute; mgmt alleges the agency shifted interpretation of waiver requirements; a special committee is also reviewing separate external allegations (Hunterbrook) .
Liquidity compression: Cash fell to $41.6M at quarter-end from $247.1M in Q2, while reported short-term debt rose to $896.6M; higher 15% PIK post-amendment raises carrying cost until first sales .

Financial Results

Company remains pre-revenue pending offtake approvals; tables present reported results and S&P Global metrics where applicable.

Metric	Q1 2025	Q2 2025	Q3 2025
Net Income ($MM)	-$109.5	-$128.1	-$110.4
Diluted EPS ($)	-$1.30*	-$1.40*	-$1.46*
EBITDA ($MM)	-$53.3*	-$125.7*	-$116.1*
Cash & Equivalents ($MM)	$189.0	$247.1	$41.6
Debt (reported) ($MM)	$854.6 (outstanding)	$875.6 (short-term)	$896.6 (short-term)
Revenues ($MM)	NA (no commercial sales)	NA (no commercial sales)	NA (no commercial sales)
EBITDA Margin %	NM	NM	NM

*Values retrieved from S&P Global.

Q3 vs S&P Global consensus (Wall Street):

EPS: Actual -$1.46 vs Consensus -$0.86 → bold miss of -$0.60. Values retrieved from S&P Global.
Revenue: Consensus $0; company disclosed no commercial sales; NA actual. Values retrieved from S&P Global and company disclosures .

KPIs and operating context:

Oil into storage: ~130,000 bbl flowed in Q2; cumulative ~350,000 bbl as of Aug 8, 2025 (within Q3) .
Shares outstanding: 89.34M (Q1), 99.48M (Q2), 99.51M (Q3) .
Monthly cash burn target (ex capex): ~$25M (guidance) .

Segment breakdown: Sable operates a single asset base (SYU) with wholly owned LFC infrastructure; no commercial sales recognized in the period .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
First sales timing	Monetization start	Q4 2025 via Las Flores pipeline restart	Q4 2026 via owned OS&T after vessel purchase/mods	Lowered/pushed out ~1 year
Production ramp	Early run-rate	45–55k BOE/d around Q1 2026 (pipeline)	45–55k BOE/d around Q1 2027 (OS&T)	Timing pushed 1 year
Run-rate LOE ($/BOE)	Steady state	$8–$10 (pipeline)	$6–$8 (OS&T)	Improved
GP&T ($/BOE)	Steady state	$4.50–$5.50 (pipeline)	$1.50–$2.50 (OS&T)	Improved
Brent differential ($/bbl)	Steady state	$9–$11 (pipeline)	$4–$6 (OS&T)	Improved
Op capex (FY26)	2026	$240–$270MM (pipeline)	$425–$475MM (OS&T, owned vessel)	Higher upfront capex
Monthly cash burn	Pre-sales	n/a	~$25MM/month ex capex (target)	New disclosure
Term loan maturity	Debt	Jan 9, 2026 (prior)	Mar 31, 2027 or 90 days post first sales, conditional on $225MM equity	Extended, conditional
Interest rate (term loan)	Debt	10% PIK	15% PIK post-amendment	Higher carrying cost
Minimum cash	Liquidity	n/a	≥$25MM unrestricted cash (monthly)	New covenant
Equity requirement	Financing	n/a	≥$225MM common equity to effect amendment	New condition
Shareholder returns	Post-sales	n/a	Plans for hedging and shareholder return program post first sales	New post-sales framework

Earnings Call Themes & Trends

Topic	Q1 2025 (prior)	Q2 2025 (prior)	Q3 2025 (current)	Trend
Offtake strategy	Focused on pipeline restart; production not yet restarted	Production restarted (Harmony) in May; hydrotests done; targeted pipeline sales in Sep 2025	Pivot to OS&T as primary path; first sales Q4 2026; plan to purchase vessel Q1 2026	Shift from pipeline to OS&T
Regulatory	Risk of reversion if not restarted by Mar 1, 2026	Awaiting OSFM final approvals for pipeline	OSFM dispute; mgmt pursuing federal approvals (BOEM/BSEE), potential Commerce involvement	State friction; federal path accelerating
Financing	Term loan outstanding; cash ~$189M	Equity raise $282.6M net; cash $247.1M	Term loan amendment (15% PIK, $225M equity condition, min cash); comprehensive refinancing targeted	Higher cost of capital; equity need
Operating costs	n/a	n/a	OS&T projected ~$10/BOE savings vs pipeline; targeted burn ~$25M/month ex capex	Structural cost benefit post-sales
Production ramp	n/a	Restarted Harmony; volumes into storage	All three platforms (Harmony/Heritage/Hondo) targeted for early run-up with OS&T	Faster ramp once sales commence
Legal/scrutiny	n/a	n/a	Special Committee reviewing Hunterbrook report allegations	Added headline risk

Management Commentary

“We believe that delays to the Las Flores pipeline restart have been unfair… This has led Sable to fully evaluate and pursue an accelerated OS&T strategy… initial projections show a potential cost savings of approximately $10 per barrel” .
“Comprehensive debt refinancing… would refinance the Exxon term loan… fund the business through 2026 through first sales… and the capital required to both purchase and modify the OS&T” .
On permits: “Our permit is kinda cruising through the DOI… they think they can get this done this year… hopefully we’d be able to take Exxon out in January” .
On operations: “We’re engineering the OS&T in island mode… enough power generation capacity… we can do it offshore and continue to produce and sell offshore” .
On California vs federal processes: “It’s been a lot more fun calling East than calling West over Sacramento” .

Q&A Highlights

Financing path: Comprehensive refinancing to take out Exxon term loan; covers LOE, G&A and OS&T purchase/mods through first sales; amendment lifts PIK rate to 15%, imposes ≥$25M minimum cash; maturity extends to Mar 31, 2027 or 90 days post first sales contingent on ≥$225M common equity .
Cash discipline: Targeting ~$25M/month cash burn ex capex; contractor demobilization and staffing adjustments drive reduction vs recent levels .
Capex/asset plan: Intend to acquire OS&T (vs lease) opportunistically; can structure lease later; plan for all three platforms ready to ramp quickly post-first sales .
Regulatory/timeline: Working with BOEM/BSEE and Commerce; seeking expedited federal clearances; OSFM dispute ongoing; OS&T viewed as executable plan vs uncertain state approvals .

Estimates Context

Q3 2025 EPS came in below consensus: Actual -$1.46 vs -$0.86 consensus (miss -$0.60). With no commercial sales, revenue remains NA while consensus expected $0. Values retrieved from S&P Global.
Forward models likely adjust to: (i) shift first sales from 2025 to Q4 2026; (ii) incorporate higher PIK interest (15%) and minimum cash covenant; (iii) add ≥$225M equity raise and OS&T capex ($425–$475M in FY26), partially offset by structurally lower run-rate costs post sales .
Net effect: Larger losses through 2026, lower steady-state unit costs and improved Brent realization post-sales, with dilution risk from required equity and timing risk tied to federal approvals. Values retrieved from S&P Global; company guidance cited.

Key Takeaways for Investors

Execution shifted decisively to OS&T with a clear critical path: federal approvals → refinancing/equity → vessel purchase/mods → Q4 2026 sales; this path reduces exposure to California state-level delays .
Pre-sales cash burn (~$25M/month ex capex) and 15% PIK interest intensify liquidity pressure; equity capital is a gating item to extend maturity and de-risk execution .
Structural economics improve post-sales vs pipeline: ~$10/BOE cost advantage, lower GP&T and Brent-linked marketing optionality could lift long-run margins and free cash conversion once volumes flow .
Near-term estimate risk is to the downside (losses, no revenue) until 2026; medium-term models should reflect faster multi-platform ramp and lower unit costs, contingent on permitting and financing .
Regulatory overhang persists (OSFM letter, Coastal Commission history), but federal pathway (BOEM/BSEE, possible Commerce override) appears constructive; monitoring cadence of federal milestones is key .
Governance/news risk: Special Committee review of external allegations adds headline volatility; outcome and disclosures could affect financing terms and investor confidence .
Trading setup: Shares likely trade on permitting and financing milestones rather than fundamentals until first sales; positive inflections would be federal clearance, signed financing, and OS&T procurement.

Notes:

Where marked with an asterisk (*), values are retrieved from S&P Global.
Company disclosures indicate no commercial sales in the quarter; revenue not recognized during the period .

Citations:

Q3 results press release and 8-K:
Strategic update 8-K and investor presentation:
Q2 results 8-K:
Q1 results 8-K:
OSFM correspondence 8-K:
Strategic update call transcript:

Sable Offshore Corp. (SOC)·Q3 2025 Earnings Summary