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Sable Offshore Corp. (SOC)·Q4 2024 Earnings Summary

Executive Summary

  • Sable Offshore reported FY 2024 net loss of $617.3M, driven by non‑cash warrant liability fair value changes, non‑cash interest expense, and production restart operating costs; Q4 2024 release focused on operational milestones and restart guidance rather than quarterly P&L granularity .
  • Regulatory progress advanced: OSFM approved enhanced pipeline integrity standards (Dec 2024), PHMSA issued non‑objection to OSFM approval (Feb 11, 2025), and SOC initiated pipeline hydrotesting in early 2025—supporting a Q2 2025 production restart target .
  • Updated 2H25 guidance targets 20,000–25,000 BOE/D net average production and $70–$90MM total operational capex; restart sequence planned: Harmony → Heritage → Hondo .
  • Balance sheet at year‑end: $300.4M cash, $833.5M debt, 89.311M shares; additional objectives include refinancing 1L term loan, instituting hedges, and launching a fixed quarterly dividend plus opportunistic repurchases post‑restart .

What Went Well and What Went Wrong

What Went Well

  • Regulatory approvals and non‑objection reduced restart risk: OSFM approved enhanced pipeline integrity standards; PHMSA communicated it did not object to OSFM’s approval, enabling hydrotesting and paving the way for restart .
  • Operational readiness: significant anomaly repair program progress; workforce ramped to >100 direct staff and ~400 contractors; completion of safety device testing and integrity inspections across facilities .
  • Clear restart plan and guidance: Q2 2025 restart targeted with sequential platform plan and 2H25 production/capex guidance—providing visibility to near‑term volumes and investment needs .
  • Management tone: “finishing the restoration of the Pipeline to as‑new condition and restarting production” with emphasis on low‑carbon intensity energy for California—signaling confidence in readiness and stakeholder alignment .

What Went Wrong

  • Continued net losses tied to non‑cash items and restart costs: FY 2024 net loss of $617.3M; Q3 2024 net loss of $255.6M; Q1 2025 net loss of $109.5M—reflecting warrant mark‑to‑market, non‑cash interest, and pre‑restart operating costs .
  • Capital structure leverage increased; debt rose to $833.5M at year‑end and $854.6M in Q1 2025, while cash fell to $189.0M in Q1 2025 amid restart activities—heightening refinancing urgency .
  • Regulatory friction and timeline risk: CCC coordination paused coastal‑zone work in late September 2024 pending interim work plan—introducing execution risk; additionally, asset reversion risk if restart not achieved by March 1, 2026 (Q3 press release used Jan 1, 2026) .

Financial Results

Revenue, EPS, Margins vs prior periods and estimates

MetricQ3 2024Q4 2024Q1 2025
Revenue ($USD)Not disclosed Not disclosed Not disclosed
Primary EPS ($USD)Not disclosed Not disclosed Not disclosed
EBITDA ($USD)Not disclosed Not disclosed Not disclosed
EBITDA Margin (%)Not disclosed Not disclosed Not disclosed
Net Income Margin (%)Not disclosed Not disclosed Not disclosed

Notes: Company is non‑producing pending pipeline restart and did not disclose quarterly revenue/EPS/margins in the cited press releases; results emphasized non‑cash losses and operational progress .

Selected P&L and Balance Metrics

MetricQ3 2024Q4 2024Q1 2025
Net Loss ($USD Millions)$255.6 Not disclosed $109.5
Cash and Equivalents ($USD Millions)$288.2 $300.4 $189.0
Total Debt ($USD Millions)$814.4 $833.5 $854.6
Shares Outstanding (Millions)78.790 89.311 89.338

Segment Breakdown (operating focus)

SegmentDescriptionRevenueNotes
Santa Ynez Unit (SYU)Offshore California platforms plus Las Flores Canyon processing facilitiesNot disclosed Non‑producing since June 2015 pending pipeline restart; 100% WI, ~83.6% NRI; restart targeted for Q2 2025 .

Operational KPIs and Milestones

KPI/MilestoneQ3 2024Q4 2024Q1 2025
Pipeline anomaly repairs~100 anomalies repaired through quarter‑end Continued execution; OSFM approved enhanced integrity standards (12/17/24) PHMSA non‑objection (2/11/25); hydrotesting initiated early 2025
Workforce ramp>100 direct staff; ~400 contractors Ongoing training/operations Ongoing per restart plan
Restart timelineTargeting Q2 2025 restart (preliminary) Reaffirmed Q2 2025; sequential platforms plan Reaffirmed; hydrotesting underway

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Net Average Daily Production (BOE/D)2H 2025N/A (not previously provided) 20,000–25,000 New
Facilities Capex ($MM)2H 2025N/A $50–$60 New
Workover Capex ($MM)2H 2025N/A $20–$30 New
Total Operational Capex ($MM)2H 2025N/A $70–$90 New
Workovers (#)2H 2025N/A 5–7 New
Restart sequenceQ2 2025N/A Harmony → Heritage → Hondo New
Shareholder return program2H 2025 onwardN/A Target fixed quarterly dividend; opportunistic repurchases; conservative leverage profile New
Financing2025N/A Refinance 1L term loan; implement hedging program New

Earnings Call Themes & Trends

Note: No Q4 2024 earnings call transcript was filed; themes reflect press releases and investor materials .

TopicQ-2 (Q2 2024)Q-1 (Q3 2024)Current Period (Q4 2024)Trend
Pipeline integrity/regulatoryNo 8‑K 2.02 found [List search]CCC coordination halted coastal‑zone work pending interim plan; anomaly repairs progressed; BSEE confirmation of leases maintained OSFM approval of enhanced integrity standards (Dec 2024); PHMSA non‑objection (Feb 2025); hydrotesting started Improving regulatory posture toward restart
Production restart timelineN/A [List search]Preliminary Q2 2025 restart target Reaffirmed Q2 2025 with sequential platform plan Increasing confidence and specificity
Operational executionN/A [List search]Safety device testing, integrity inspections, compressor overhauls; workforce ramp Continued anomaly repairs; hydrotesting initiated Progressing per plan
Financing & capital allocationN/A [List search]Redeemed public warrants ($183.5M gross); cash $288.2M, debt $814.4M Year‑end cash $300.4M, debt $833.5M; plans to refinance, hedge, and initiate dividend/buybacks Preparing for post‑restart capital strategy
CCS strategyN/A [List search]Exploring CCS leveraging existing infrastructure Ongoing evaluation highlighted in investor materials Early‑stage exploration maintained

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 .
  • Restart cadence and guidance framed for 2H25 with operational capex and workover counts; management sets objectives to refinance 1L term loan, implement hedging, and launch shareholder returns (dividend, repurchases) .

Q&A Highlights

  • No Q4 2024 earnings call transcript was available in filings; therefore, Q&A themes and any on‑call guidance clarifications are unavailable [List search with no results].
  • Notable clarifications from press releases/investor materials: restart sequence (Harmony → Heritage → Hondo), 2H25 production range, capex/workover guidance, and regulatory status (OSFM approval; PHMSA non‑objection) .

Estimates Context

  • Wall Street consensus via S&P Global was unavailable at time of analysis due to data access limits; as a result, no quantitative comparison vs consensus can be provided. Values that would normally appear here are unavailable from S&P Global at this time.
  • Qualitative implication: Street models likely need to incorporate 2H25 production guidance (20–25k BOE/D), capex ($70–$90MM), and staged platform restart, plus potential dividend initiation and refinancing effects on interest expense and liquidity .

Key Takeaways for Investors

  • Regulatory path clearing: OSFM approvals and PHMSA non‑objection materially de‑risk pipeline restart; hydrotesting commencement signals execution traction toward Q2 2025 production .
  • Clear operating plan with tangible guidance: 2H25 production 20–25k BOE/D and $70–$90MM capex with 5–7 workovers provide anchors for near‑term cash flow modeling post‑restart .
  • Balance sheet and capital strategy: Year‑end cash $300.4M vs debt $833.5M, moving to refinance 1L term loan and implement hedges; management targets fixed quarterly dividend and opportunistic buybacks, contingent on restart and cash generation .
  • Execution watch‑items: CCC coordination in the coastal zone, completion of anomaly repairs, hydrotest outcomes, and OSFM approval of updated start‑up plan—each a critical gating item for restart .
  • Risk disclosure: Asset reversion risk if restart not achieved by March 1, 2026 (note earlier Q3 reference to Jan 1, 2026); continued non‑cash P&L volatility from warrant liabilities and non‑cash interest until operations normalize .
  • Medium‑term thesis: Large oil‑weighted resource with shallow decline and identified development inventory (>100 opportunities) positions SOC for meaningful volume ramp and shareholder returns once infrastructure is online .
  • Trading implications: Near‑term tape likely driven by restart milestones (hydrotest completion, start‑up plan approval, first volumes) and financing/refi updates; announcements on dividend timing could be catalysts .

Primary Sources Read:
- Q4 2024 8‑K 2.02 press release and investor materials (Mar 17, 2025): **[1831481_0001831481-25-000017_a991_q42024pressrelease.htm:0]** **[1831481_0001831481-25-000017_a992_socinvestorpresenta.htm:0]** **[1831481_0001831481-25-000017_a992_socinvestorpresenta.htm:1]** **[1831481_0001831481-25-000017_a992_socinvestorpresenta.htm:2]** **[1831481_0001831481-25-000017_a992_socinvestorpresenta.htm:3]** **[1831481_0001831481-25-000017_a992_socinvestorpresenta.htm:4]** **[1831481_0001831481-25-000017_a992_socinvestorpresenta.htm:5]** **[1831481_0001831481-25-000017_a992_socinvestorpresenta.htm:6]** **[1831481_0001831481-25-000017_a992_socinvestorpresenta.htm:7]** **[1831481_0001831481-25-000017_a992_socinvestorpresenta.htm:8]** **[1831481_0001831481-25-000017_a992_socinvestorpresenta.htm:9]** **[1831481_0001831481-25-000017_a992_socinvestorpresenta.htm:10]** **[1831481_0001831481-25-000017_socc-20250317.htm:0]** **[1831481_0001831481-25-000017_socc-20250317.htm:3]**
- Q4‑adjacent regulatory 8‑K (Dec 19, 2024): **[1831481_0001193125-24-281658_d859221d8k.htm:1]**
- Prior quarter (Q3 2024) 8‑K 2.02 press release and CCC coordination release (Nov 14, 2024): **[1831481_0001193125-24-258796_d894574dex991.htm:0]** **[1831481_0001193125-24-258796_d894574dex992.htm:0]**
- Subsequent quarter (Q1 2025) 8‑K 2.02 press release (May 9, 2025): **[1831481_0001831481-25-000035_a991_q12025pressrelease.htm:0]**