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What changed in Sable Offshore Corp.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Sable Offshore Corp.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+569 added−547 removedSource: 10-K (2025-03-17) vs 10-K (2024-03-28)

Top changes in Sable Offshore Corp.'s 2024 10-K

569 paragraphs added · 547 removed · 141 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

25 edited+50 added−219 removed16 unchanged
Biggest changeSYU consists of three offshore platforms and a wholly owned onshore processing facility located along the Gaviota Coast at Las Flores Canyon in Santa Barbara County, California. SYU’s onshore facilities and the three offshore platforms remained in continuous operation until 2015.
Biggest changeBeginning in 1968 and over the course of 14 years, EM consolidated more than a dozen offshore federal oil leases and organized them into a streamlined production unit known as SYU. SYU consists of three offshore platforms and a wholly owned onshore processing facility located along the Gaviota Coast at Las Flores Canyon in Santa Barbara County, California.
There are disputes with respect to certain of the rights-of-way or other interests and any unfavorable outcomes of such disputes could require us to incur additional costs. ” Aside from the foregoing, the owners of the SYU Assets and the Pipelines believe they have satisfactory title or other rights to all such properties in accordance with industry standards, and Sable conducted thorough diligence and title investigations in advance of the Business Combination.
There are disputes with respect to certain of the rights-of-way or other interests and any unfavorable outcomes of such disputes could require us to incur additional costs. ” Aside from the foregoing, the owners of the SYU Assets believe they have satisfactory title or other rights to all such properties in accordance with industry standards, and Sable conducted thorough diligence and title investigations in advance of the Business Combination.
Title to Properties The interests in the properties on which the SYU Assets and the Pipelines are located and their operations are conducted derive from ownership, leases, easements, rights-of-way, permits, or licenses from landowners or governmental authorities, permitting the use of such real property for their operations.
Title to Properties The interests in the properties on which the SYU Assets are located and their operations are conducted derive from ownership, leases, easements, rights-of-way, permits, or licenses from landowners or governmental authorities, permitting the use of such real property for their operations.
In connection with the Business Combination, a substantial portion of the existing employees of SYU have continued in their same capacity with Sable. The offshore platforms have permanent drilling systems in place.
In connection with the Business Combination, a substantial portion of the existing employees of SYU Assets have continued in their same capacity with Sable. The offshore platforms have permanent drilling systems in place.
There is no assurance that any of the petroleum contained in the SYU Assets will ever be recovered or reclassified as “reserves.” The resources are contingent upon (1) approval from federal, state and local regulators to restart production, (2) reestablishment of oil transportation systems to deliver production to market and (3) commitment to restart the wells and facilities.
There is no assurance that any of the petroleum contained in the SYU Assets will ever be recovered or reclassified as “reserves.” The resources are contingent upon (1) approval from and/or inspection by federal, state and local regulators to restart production, (2) reestablishment of oil transportation systems to deliver production to market and (3) commitment to restart the wells and facilities.
After the Line 901 incident, the SYU platforms and facilities suspended production, the SYU Assets were shut in and the facilities were placed in a safe state as described below under “ —Pipeline 901 Incident .” SYU Contingent Resources The estimated quantities of petroleum contained in the SYU Assets are classified as “contingent resources” as of December 31, 2023 rather than “reserves” because they are subject to numerous contingencies.
After the Line 901 incident, the SYU platforms and facilities suspended production, the SYU Assets were shut in and the facilities were placed in a safe state as described below under “ —Pipeline 901 Incident .” SYU Contingent Resources The estimated quantities of petroleum contained in the SYU Assets are classified as “contingent resources” as of December 31, 2024 rather than “reserves” because they are subject to numerous contingencies.
As a result of the contingencies noted above, none of the estimated petroleum quantities attributed to the SYU Assets as of December 31, 2023 meet the requirements for disclosure as reserves pursuant to the guidelines published by the SEC in Rule 4-10(a) of Regulation S-X. Pipeline 901 Incident In May 2015, Plains All American Pipeline, L.P.
As a result of the contingencies noted above, none of the estimated petroleum quantities attributed to the SYU Assets as of December 31, 2024 meet the requirements for disclosure as reserves pursuant to the guidelines published by the SEC in Rule 4-10(a) of Regulation S-X. Pipeline 901 Incident In May 2015, Plains All American Pipeline, L.P.
EM did not make rental payments for use of a right-of-way easement for the Pipelines and there is some risk the government could allege the easement has lapsed, as further described under “ Risk Factors- We do not own all of the land on which our assets are located or all of the land that we must traverse in order to conduct our operations.
EM did not make rental payments for use of a right-of-way easement for the Pipelines and there is some risk the government could allege the easement has lapsed, as further described under “ Risk 6 Table of Contents Factors- We do not own all of the land on which our assets are located or all of the land that we must traverse in order to conduct our operations.
Additionally, various government agencies sought to collect civil fines and penalties from Plains under applicable state and federal regulations. On March 13, 2020, Plains entered into a pre-negotiated settlement agreement in the form of a Consent Decree (the “ Consent Decree ”) with the U.S. Department of Justice, Environmental and Natural Resources Division, the U.S.
Additionally, various government agencies sought to collect civil fines and penalties from Plains under applicable state and federal regulations. On March 13, 2020, Plains entered into a pre-negotiated settlement agreement in the form of a Consent Decree (the “Consent Decree”) with the U.S. Department of Justice, Environmental and Natural Resources Division, the U.S.
The wholly owned onshore processing facility is a fully integrated oil and gas processing facility with additional capacity for development. The natural gas and NGLs it processed prior to the Line 901 incident were sold into the Southern California markets and the oil volumes were sold to California refineries.
The wholly owned onshore processing facility is a fully integrated oil and gas processing facility with additional capacity for development. The natural gas and natural gas liquids (“NGLs”) it processed prior to the Line 901 incident were sold into the Southern California markets and the oil volumes were sold to California refineries.
Line 903 is a 30-inch, approximately 113 mile long crude oil pipeline that extends from the Gaviota Pump Station in Santa Barbara County, California to the 30-inch pig receiver located in Pentland Station in Kern County, California with an intermediate station at Sisquoc mile post 38.5 in San Louis Obispo, California.
Line 325 (formerly known as Line 903) is a 30-inch, approximately 113 mile long crude oil pipeline that extends from the Gaviota Pump Station in Santa Barbara County, California to the 30-inch pig receiver located in Pentland Station in Kern County, California with an intermediate station at Sisquoc mile post 38.5 in San Louis Obispo, California.
Following the Line 901 incident, Plains entered into a cooperative Natural Resource Damage Assessment (“ NRDA ”) process with the federal and state agencies designated or authorized by law to act as trustees for the natural resources of the United States and the State of California (collectively, the “ Trustees ”).
Following the Line 901 incident, Plains entered into a cooperative Natural Resource Damage Assessment (“NRDA”) process with the federal and state agencies designated or authorized by law to act as trustees for the natural resources of the United States and the State of California (collectively, the “Trustees”).
The Consent Decree also contains requirements for potentially restarting Line 901 and the Sisquoc to Pentland portion of Line 903. On October 13, 2022, Plains sold Line 901 and the Sisquoc to Pentland portion of Line 903 to PPC.
The Consent Decree also contains requirements for potentially restarting Line 901 and the Sisquoc to Pentland portion of Line 903. 3 Table of Contents On October 13, 2022, Plains sold Line 901 and the Sisquoc to Pentland portion of Line 903 to PPC.
Line 901 is a 24-inch, approximately 10.8 mile long crude oil pipeline that extends from the Los Flores Station on the California Coast to the Gaviota Pump Station in Santa Barbara County, California.
Line 324 (formerly known as Line 901) is a 24-inch, approximately 10.8 mile long crude oil pipeline that extends from the Los Flores Station on the California Coast to the Gaviota Pump Station in Santa Barbara County, California.
Operations General Sable is the owner of the SYU Assets and the Pipelines. Prior to consummation of the Business Combination, EM was the owner and operator of the SYU Assets and Plains was the owner and operator of the Pipelines. EM acquired the Pipelines from Plains on October 13, 2022 pursuant to the EM-Plains Purchase Agreement.
Operations General Sable is the owner of the SYU Assets. Prior to consummation of the Business Combination, EM was the owner and operator of the platforms and onshore processing facility and Plains was the owner and operator of the Pipelines. EM acquired the Pipelines from Plains on October 13, 2022 pursuant to the EM-Plains Purchase Agreement.
(“ Plains ”) experienced a crude oil release from the Las Flores to Gaviota Pipeline (Line 901) in Santa Barbara County, California (the “ Line 901 incident ”). According to Plains, a portion of the released crude oil reached the Pacific Ocean at Refugio State Beach through a drainage culvert.
(“Plains”) experienced a crude oil release from the Las Flores to Gaviota Pipeline (Line 901) in Santa Barbara County, California (the “Line 901 incident”). According to Plains, a portion of the released crude oil reached the Pacific Ocean at Refugio State Beach through a drainage culvert.
The Pipelines were used to deliver oil to local refinery markets. Following the crude oil release described further below, Plains indicated it shut down the pipeline, initiated its emergency response plan, and the Pipelines were subsequently emptied and placed in a safe state.
Following the crude oil release described further below, Plains indicated it shut down the pipeline, initiated its emergency response plan, and the Pipelines were subsequently emptied and placed in a safe state.
The onshore facilities occupy approximately 35 acres and are comprised of: • an oil treating plant with capacity of approximately 180 MBop/d where it conducts crude dehydration, crude stabilization, and gas separation and compression; • a biologic/physical water treating plant with capacity of more than 67 MBwp/d where it conducts free oil removal, degassing, and biological treatment; • POPCO gas plant with approximately 80 Mcf/d sales capacity where it conducts gas sweetening, sulfur recovery, NGL fractionation, and gas compression; • another gas processing plant where it conducts gas sweetening, sulfur recovery, and NGL fractionation, and sends fuel gas to the co-generation power plant; • an almost entirely electric co-generation power plant with a capacity of 50 MW, including a 40 MW gas turbine, a 10 MW steam turbine, and steam generation; • crude storage capacity of 540 MBbls; • a produced water pipeline, which is partially offshore; • liquified petroleum gas storage and loading; and • a transportation terminal. 3 Table of Contents In addition to SYU, Sable also acquired in the Business Combination the Pipelines, which were owned and operated by Plains and were recently acquired by EM.
The onshore facilities occupy approximately 35 acres and are comprised of: • an oil treating plant with capacity of approximately 180 MBop/d where it conducts crude dehydration, crude stabilization, and gas separation and compression; • a biologic/physical water treating plant with capacity of more than 67 MBwp/d where it conducts free oil removal, degassing, and biological treatment; • POPCO gas plant with approximately 80 MMcf/d sales capacity where it conducts gas sweetening, sulfur recovery, NGL fractionation, and gas compression; • another gas processing plant where it conducts gas sweetening, sulfur recovery, and NGL fractionation, and sends fuel gas to the co-generation power plant; • an almost entirely electric co-generation power plant with a capacity of 50 MW, including a 40 MW gas turbine, a 10 MW steam turbine, and steam generation; • crude storage capacity of 540 MBbls; • a produced water pipeline, which is partially offshore; • liquified petroleum gas storage and loading; and • a transportation terminal.
SYU Production History Between 1981 and 2014, SYU produced over 671 MMBoe of oil and gas. An average of 27 MMcf of natural gas and 29 MBbls of oil and condensate was produced per day (gross) in 2014, the last full year when the assets were online.
An average of 27 MMcf of natural gas and 29 MBbls of oil and condensate was produced per day (gross) in 2014, the last full year when the assets were online.
Department of Transportation, Pipeline and Hazardous Materials Safety Administration, the EPA, CDFW, the 4 Table of Contents California Department of Parks and Recreation, the California State Lands Commission, the California Department of Forestry and Fire Protection’s Office of the State Fire Marshal, Central Coast Regional Water Quality Control Board, and Regents of the University of California.
Department of Transportation, Pipeline and Hazardous Materials Safety Administration (“PHMSA”), the EPA, CDFW, the California Department of Parks and Recreation (“State Parks”), the California State Lands Commission (“SLC”), the California Department of Forestry and Fire Protection’s Office of the State Fire Marshal (“OSFM”), Central Coast Regional Water Quality Control Board (“Regional Board”), and Regents of the University of California.
Coast Guard, the EPA, the State of California Department of Fish and Wildlife (“ CDFW ”), the California Office of Spill Prevention and Response and the Santa Barbara Office of Emergency Management, was established for the response effort.
Coast Guard, the Environmental Protection Agency (“EPA”), the State of California Department of Fish and Wildlife (“CDFW”), the California Office of Spill Prevention and Response and the Santa Barbara Office of Emergency Management, was established for the response effort.
OSFM Restart Plan Approval : The Consent Decree (“ CD ”) prescribes what must be submitted to restart the Pipelines, including the state waiver application for the existing cathodic protection system (which comprises in part the “ Restart Plan ”). The CD also includes the AB-864 risk assessment and mitigation (i.e., additional isolation valves or other CBAT).
The Consent Decree prescribes what must be submitted in the Restart Plans, including a long-term plan for enhancing the existing cathodic protection system (in the form of state waivers through the OSFM) and the AB 864 risk assessment and mitigation plan (i.e., additional isolation valves or other CBAT).
In 2020, Plains entered into a Consent Decree, described further below under “ —Pipeline 901 Incident, ” that provides a path for a potential restart of Lines 901 and 903. Assets SYU is comprised of three platforms located in federal waters offshore California and its onshore processing facility.
In 2020, Plains entered into a Consent Decree, described further below under “ —Pipeline 901 Incident, ” that provides a path for a potential restart of the pipelines.
Item 1. Business References in this section to “we,” “our” and “us” generally refer to Legacy Sable prior to the Business Combination and Sable after the Business Combination. Overview Beginning in 1968 and over the course of 14 years, EM consolidated more than a dozen offshore federal oil leases and organized them into a streamlined production unit known as SYU.
Item 1. Business References in this section to “we,” “our” and “us” generally refer to Legacy Sable (as defined below) prior to the Business Combination and Sable (as defined below) after the Business Combination. Overview Sable Offshore Corp.
Waivers have been prepared and submitted by PPC to OSFM for approval and will be included as part of the restart plan to be submitted at least sixty days prior to restart of production. 5 Table of Contents Given our current progress on these requirements, we believe that these requirements will not inhibit our ability to restart the onshore and offshore facilities consistent with our timeline of restarting production during the third quarter of 2024.
Given the Company’s current progress in complying with AB 864, submitting the Restart Plan to the OSFM, and repairing Lines 324 and 325, we believe that these requirements will not inhibit our ability to restart the onshore and offshore facilities consistent with our timeline of restarting production during the second quarter of 2025.
Removed
We consider the following to be material, albeit achievable requirements to restarting Line 901 and Line 903: (1) satisfaction of all California Assembly Bill 864 (“ AB-864 ”) provisions requiring pipelines be equipped with the Coastal Best Available Technology (“ CBAT ”) that provides the greatest degree of protection by limiting the quantity of release in the event of an oil spill, (2) submission to Santa Barbara County of a transition plan demonstrating we have adequate training and a good working knowledge of any and all county compliance plans, (3) approval of zoning clearance applications, if necessary, by Santa Barbara, San Luis Obispo and Kern Counties, and (4) approval from the California Department of Forestry and Fire Protection’s Office of the State Fire Marshal (the “OSFM”) of a restart plan for Lines 901 and 903 (application for which is to be submitted at least 60 days prior to restart).
Added
(“Sable”) (formerly known as Flame Acquisition Corp. or “Flame”) was a blank check company originally incorporated on October 16, 2020 as a Delaware corporation for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or other similar business combination with one or more businesses or entities.
Removed
The parties continue to progress the processing and receipt of the above material regulatory actions in order to meet a production restart schedule of the third quarter of 2024: 1. AB-864 CBAT Requirement : On July 13, 2022, OSFM accepted the AB-864 Risk Analysis and Initial and Supplemental Implementation Plans.
Added
On March 1, 2021, Flame consummated an initial public offering (the “Flame IPO”), after which its securities began trading on the New York Stock Exchange (“NYSE”).
Removed
The parties also are exploring alternative CBAT (such as added pipeline internal and external inspections, additional spill containment, enhanced leak detection, and alternatives to existing corrosion protection/monitoring, such as polymer-based liners that are corrosion-free) to satisfy AB-864 requirements given Santa Barbara County’s failure to approve zoning permits for the installation of safety valves as further set forth below.
Added
On November 2, 2022, Flame entered into that certain Agreement and Plan of Merger (the “Merger Agreement”), dated November 2, 2022 (as amended on December 22, 2022 and June 30, 2023), by and among Flame, Sable Offshore Holdings LLC, a Delaware limited liability company (“Holdco”), and Sable Offshore Corp., a Texas corporation and a wholly owned subsidiary of Holdco (“Legacy Sable”).
Removed
After closing of the Business Combination, PPC withdrew the prior management’s alternate AB-864 Risk Analysis and Initial Implementation Plan filed in November of 2023 and PPC, under new Sable management, will be filing a new, enhanced alternate AB-864 Risk Analysis and Initial Implementation Plan by the end of April 2024 for OSFM consideration and approval.
Added
Legacy Sable entered into a Purchase and Sale Agreement (as amended, the “Sable-EM Purchase Agreement”) on November 1, 2022, with Exxon Mobil Corporation (“Exxon”) and Mobil Pacific Pipeline Company (“MPPC,” and together with Exxon, “EM”) pursuant to which Legacy Sable agreed to acquire from EM certain assets constituting the Santa Ynez field in Federal waters offshore California and associated onshore processing and pipeline assets (such “Assets,” as defined in the Sable-EM Purchase Agreement, the “SYU Assets”).
Removed
Sable believes the new, enhanced approach and plan will greatly increase PPC’s abilities to satisfy the AB 864 requirements and will continue to work diligently with OSFM officials and staff to accomplish the same. The Business Combination is not expected to have any impact on PPC’s satisfaction of AB-864 requirements. 2.
Added
SYU’s onshore facilities and the three offshore platforms remained in continuous operation until 2015.
Removed
Submission of Transition Plan : Sable submitted its transition plan to Santa Barbara County on March 14, 2024 and is awaiting feedback. 3. Approval of Zoning Applications : On September 16, 2021 San Luis Obispo County approved the zoning clearance for San Luis Obispo County. On July 12, 2022 Kern County approved the zoning clearance for Kern County.
Added
On February 14, 2024 (the “Closing Date”), Sable consummated the mergers and related transactions contemplated by the Merger Agreement (the “Business Combination”), following which Flame was renamed “Sable Offshore Corp.” Pursuant to the terms and subject to the conditions set forth in the Sable-EM Purchase Agreement, the transactions contemplated by the Sable-EM Purchase Agreement were also consummated on February 14, 2024, immediately after the Closing, as a result of which Sable purchased the SYU Assets, effective as of January 1, 2022.
Removed
Santa Barbara County approved zoning applications on August 22, 2022, which were appealed on September 1, 2022. On April 26, 2023, the Santa Barbara County Planning Commission voted in favor of appellants’ complaints and denied the zoning applications. PPC appealed the Planning Commission’s denial to the Santa Barbara County Board of Supervisors on May 8, 2023.
Added
On February 15, 2024, Sable’s shares of Common Stock, par value $0.0001 per share (“Common Stock”) and warrants to purchase Common Stock at an exercise price of $11.50 per share (the “Public Warrants”) began trading on NYSE under the symbols, “SOC” and “SOC.WS,” respectively.
Removed
On August 22, 2023, the Santa Barbara County Board of Supervisors deadlocked in a vote on the appeal, resulting in no action taken on nor prejudice to the application. As noted above, PPC will submit to OSFM an enhanced alternative CBAT implementation plan that will not require Santa Barbara County zoning approval.
Added
Since the Closing Date, the Company has invested significant capital to safely restore production operations to SYU. Sable began hydrotesting the Pipeline in early 2025 in advance of a potential restart of production from the Santa Ynez Unit offshore platforms and the associated Las Flores Canyon processing facilities in the second quarter of 2025.
Removed
Should the alternative CBAT implementation plan be accepted by the OSFM for the segment of the pipelines located in Santa Barbara County, no further zoning approvals will be required to restart Line 901 and Line 903. 4.
Added
Unless otherwise noted or the context otherwise requires, references to (i) the “Company,” “Sable,” “we,” “us,” or “our” are to Sable Offshore Corp, a Delaware corporation, and its consolidated subsidiaries, following the Business Combination, (ii) “Flame” refers to Flame Acquisition Corp. prior to the Business Combination, (iii) “PPC” refers to Pacific Pipeline Company, a Delaware corporation, the equity of which was transferred from MPPC to Sable on the Closing Date pursuant to the Sable-EM Purchase Agreement, and (iv) the “Pipelines” are to Pipeline Segments 324/325 (formally known as Pipeline Segments 901/903) and the other “324/325 Assets” (formally known as "901/903 Assets" and as defined in the Sable-EM Purchase Agreement). 1 Table of Contents Assets SYU Assets are comprised of three platforms located in federal waters offshore California and an onshore processing facility and pipeline assets.
Removed
Delivery Commitments Sable has no commitments to deliver a fixed and determinable quantity of its oil or natural gas production in the near future under any existing sales contracts.
Added
Sable also acquired the Pipelines in the Business Combination, which were owned and operated by Plains and were acquired by EM on October 13, 2022. The Pipelines were used to deliver oil to local refinery markets.
Removed
Derivative Activities Sable is not currently party to any commodity derivative contracts but as the restart of production approaches Sable may enter into commodity derivative contracts with unaffiliated third parties to achieve more predictable cash flows and to reduce exposure to fluctuations in oil and natural gas prices.
Added
On October 30, 2024, the Santa Barbara County Planning Commission (“Planning Commission”) approved the Company’s application for Change of Owner, Operator, and Guarantor for the Final Development Plan permits for the SYU, Pacific Offshore Pipeline Company Gas Plant, and the Pipelines.
Removed
Sable may enter into commodity derivative contracts at times and on terms desired to maintain a portfolio of commodity derivative contracts covering a specified percentage or range of its estimated production over a one-to-three-year period at any given point of time. It may, however, hedge more or less than this approximate amount from time to time.
Added
On November 5, 2024 and November 7, 2024, appeals of the Planning Commission’s October 30, 2024 approval of the permit transfers were filed. On February 25, 2025, the Santa Barbara County Board of Supervisors heard the appeals and voted 2-2 to uphold the appeals and 2-2 to deny the appeals, thus taking no action.
Removed
Sable is not currently party to any interest rate swaps and substantially all of Sable’s indebtedness from the Business Combination consists of fixed-rate indebtedness. However, if Sable incurs variable rate indebtedness in the future it may periodically enter into interest rate swaps to mitigate exposure to market rate fluctuations by converting variable interest rates to fixed interest rates.
Added
Sable understands this to mean that the Planning Commission’s approval of the application stands, and has sought confirmation of the same understanding from Santa Barbara County. 2 Table of Contents SYU Production History Between 1981 and 2014, SYU produced over 671 MMBoe of oil and gas.
Removed
Sable will only enter into derivative contracts with creditworthy counterparties (generally, financial institutions) deemed by management as competent and competitive market makers. Those counterparties may include existing or future lenders or their affiliates. Sable will continue to evaluate the benefit of employing derivatives in the future.
Added
Restarting Lines 324 and 325 Restarting Lines 324 and 325 requires certain regulatory approvals and other actions, such as pipeline repair and maintenance activities, that may implicate federal, state, and local regulations.
Removed
Pursuant to the Term Loan Agreement (as defined below), Sable has agreed not enter into any derivative contracts until after the term loan is refinanced in full. Competition Sable operates in a highly competitive environment for securing trained personnel, contracting for drilling equipment, and from time to time leasing or otherwise acquiring new acreage.
Added
AB 864 Coastal Best Available Technology Pursuant to Assembly Bill (“AB”) 864, the Office of the State Fire Marshall (“OSFM”) promulgated Coastal Best Available Technologies (“CBAT”) regulations that mandates the use of the best available technology for pipelines in environmentally sensitive coastal areas to minimize oil spills.
Removed
Many of its competitors possess and employ financial, technical and personnel resources substantially greater than Sable’s, which can be particularly important in the areas in which it operates.
Added
In adhering to CBAT regulations, operators are required to submit a risk analysis to the OSFM for approval. If an operator identifies the best available technology to mitigate the quantity of hazardous liquid spills in case of a release, it must specify these technologies and propose their retrofitting into the pipeline.
Removed
As a result, SYU’s competitors may be able to pay more for productive oil and natural gas properties and exploratory prospects, as well as evaluate, bid for and purchase a greater number of properties and prospects than its financial or personnel resources permit.
Added
Following the installation of these technologies, the OSFM will review the operator's records to confirm compliance with CBAT regulations. On July 13, 2022, OSFM accepted the AB 864 Risk Analysis and Initial and Supplemental Implementation Plans submitted by PPC’s predecessor in April 2021 (the “2021 CBAT Plan”).
Removed
Sable’s ability to acquire additional properties and to find and develop reserves and resources will depend on its ability to evaluate and select suitable properties and to consummate transactions in a highly competitive environment.
Added
On July 20, 2024, the OSFM stated that the 2021 CBAT Plan remains in effect and complies with AB-864, representing the best available technology.
Removed
In addition, there is substantial competition for capital available for investment in the oil and natural gas industry and many of its competitors have access to capital at a lower cost than that available to SYU or Sable. 6 Table of Contents Seasonality Sable’s offshore operations can be impacted by inclement weather from time to time.
Added
On September 4, 2024, Santa Barbara County (the “County”) acknowledged that it does not have permit authority or jurisdiction over PPC’s installation of sixteen new safety valves in the County along the Pipelines in accordance with the 2021 CBAT Plan.
Removed
The price Sable receives for natural gas production is typically impacted by seasonal fluctuations in demand for natural gas. The demand for natural gas typically peaks during the coldest months and tapers off during the milder months, with a slight increase during the summer to meet the demands of electric generators.
Added
The County’s acknowledgement was delivered pursuant to a conditional settlement agreement dated August 30, 2024 (the “Safety Valve Settlement Agreement”), among the County, PPC and the Company. Pursuant to the Safety Valve Settlement Agreement, PPC agreed to the following additional surveillance and response enhancements in the County: i.
Removed
The weather during any particular season can affect this cyclical demand for natural gas. Seasonal anomalies such as mild winters or hot summers can lessen or intensify this fluctuation. In addition, certain natural gas users utilize natural gas storage facilities and purchase some of their anticipated winter requirements during the summer. This can also lessen seasonal demand fluctuations.
Added
PPC will create a Santa Barbara County-based Surveillance and Response Team, trained to comply with PPC’s tactical response plan, which will be responsible for timely initial incident response and equipped with key resources to deploy in early containment, particularly for those regions of the Pipeline between Gaviota and Las Flores Canyon; ii.
Removed
Recently there has been elevated global demand for natural gas due to shortages exacerbated by geopolitical issues and conflicts but there is no assurance that demand will remain elevated.
Added
PPC will provide Santa Barbara first responders with additional training and equipment to assist in PPC’s incident response efforts; and iii. PPC will undertake the following Pipeline system enhancements: (1) install and operate and maintain primary and secondary operations control centers in Santa Barbara County, and (2) refurbish the Gaviota pump in its existing station.
Removed
Insurance In accordance with customary industry practice, Sable will maintain insurance against many, but not all, potential losses or liabilities arising from its operations and at costs that it believes to be economic. Sable will regularly review its risks of loss and the cost and availability of insurance and revise its insurance accordingly.
Added
PPC, the Company and the County further agreed, in the Safety Valve Settlement Agreement, to file a stipulation to dismiss the pending lawsuit, Pacific Pipeline Company and Sable Offshore Corp. v. Santa Barbara County Planning Commission and Board of Supervisors (Case No. 2:23-cv-09218-DMG-MRW) within 15 days of final installation of all sixteen underground safety valves in the County.
Removed
Its insurance will not cover every potential risk associated with its operations, including the potential loss of significant revenues. Sable can provide no assurance that its coverage will adequately protect it against liability from all potential consequences, damages and losses.
Added
Sable subsequently installed each of the sixteen required valves. Pursuant to the Safety Valve Settlement Agreement, Pacific Pipeline Company and Sable Offshore Corp. v. Santa Barbara County Planning Commission and Board of Supervisors was voluntarily dismissed on December 9, 2024. Refer to Pipeline Maintenance and Repair Work of Item 1.
Removed
Prior to or upon the restart of production Sable expects to have insurance policies including the following: Commercial General Liability; Oil Pollution Act Liability; Primary Umbrella / Excess Liability; Pollution Legal Liability; Property; Charterer’s Legal Liability; Workers’ Compensation; Non-Owned Aircraft Liability; Employer’s Liability; Automobile Liability; Maritime Employer’s Liability; Directors & Officers Liability; U.S.
Added
Business below for further discussion of regulatory developments related to the Company’s installation of safety valves. 4 Table of Contents OSFM Restart Plan Approval The Consent Decree requires OSFM approval of restart plans for each of the Pipelines (the “Restart Plans”) prior to returning Lines 324 and 325 to service.
Removed
Longshore and Harbor Workers’; Employment Practices Liability; Energy Package/Control of Well; Crime; Loss of Production Income; Fiduciary Liability; and Cybersecurity. Sable monitors regulatory changes and comments and considers their impact on the insurance market, along with SYU’s overall risk profile.
Added
On July 29, 2024, PPC submitted the Restart Plans to OSFM for approval. On December 17, 2024, the OSFM approved Sable’s implementation of enhanced pipeline integrity standards for the Pipelines by granting state waivers of certain regulatory requirements related to cathodic protection and seam weld corrosion for the Pipelines.
Removed
As necessary, Sable expects to adjust its risk and insurance program to provide protection at a level it considers appropriate while weighing the cost of insurance against the potential and magnitude of disruption to its operations and cash flows.
Added
On February 11, 2025, PHMSA notified the OSFM that PHMSA does not object to the OSFM’s granting of the state waivers. Sable plans to submit updated Restart Plans and anticipates the OSFM will approve the Restart Plans following the completion and testing of the anomaly repair and maintenance work.
Removed
Changes in laws and regulations could lead to changes in underwriting standards, limitations on scope and amount of coverage, and higher premiums, including possible increases in liability caps for claims of damages from oil spills.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeOur warrant agreement designates the courts of the State of New York or the United States District Court for the Southern District of New York as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by holders of our warrants, which could limit the ability of Warrant Holders to obtain a favorable judicial forum for disputes with our company. 38 Table of Contents Our warrant agreement provides that, subject to applicable law, (i) any action, proceeding or claim against us arising out of or relating in any way to the warrant agreement, including under the Securities Act, will be brought and enforced in the courts of the State of New York or the United States District Court for the Southern District of New York, and (ii) that we irrevocably submit to such jurisdiction, which jurisdiction will be the exclusive forum for any such action, proceeding or claim.
Biggest changeOur warrant agreement provides that, subject to applicable law, (i) any action, proceeding or claim against us arising out of or relating in any way to the warrant agreement, including under the Securities Act, will be brought and enforced in the courts of the State of New York or the United States District Court for the Southern District of New York, and (ii) that we irrevocably submit to such jurisdiction, which jurisdiction will be the exclusive forum for any such action, proceeding or claim.
For as long as we remain an emerging growth company, we may choose to take advantage of exemptions from various reporting requirements applicable to other public companies but not to “emerging growth companies,” including: • not being required to have an independent registered public accounting firm audit our internal control over financial reporting under Section 404 of the Sarbanes-Oxley Act; • reduced disclosure obligations regarding executive compensation in our periodic reports and annual report on Form 10-K; and • exemptions from the requirements of holding non-binding advisory votes on executive compensation and stockholder approval of any golden parachute payments not previously approved.
For as long as we remain an emerging growth company, we may choose to take advantage of exemptions from various reporting requirements applicable to other public companies but not to “emerging growth companies,” including: • not being required to have an independent registered public accounting firm audit our internal control over financial reporting under Section 404 of the Sarbanes-Oxley Act; • reduced disclosure obligations regarding executive compensation in our periodic reports and annual reports on Form 10-K; and • exemptions from the requirements of holding non-binding advisory votes on executive compensation and stockholder approval of any golden parachute payments not previously approved.
Historically, oil and natural gas prices have been volatile and fluctuate in response to changes in supply and demand, market uncertainty, and other factors that are beyond our control, including: • the regional, domestic and foreign supply of oil, natural gas and NGLs; • the level of commodity prices and expectations about future commodity prices; 20 Table of Contents • the level of global oil and natural gas exploration and production; • localized supply and demand fundamentals, including the proximity and capacity of pipelines and other transportation facilities, and other factors that result in differentials to benchmark prices from time to time; • the cost of exploring for, developing, producing and transporting oil, natural gas and NGLs; • the price and quantity of foreign imports; • political and economic conditions in oil producing countries, including conflicts in or among the Middle East, Africa, South America and Russia; • the ability of members of the Organization of Petroleum Exporting Countries to agree to and maintain oil price and production controls; • speculative trading in crude oil and natural gas derivative contracts; • the level of consumer product demand; • weather conditions and other natural disasters; • risks associated with operating drilling rigs; • technological advances affecting exploration and production operations and overall energy consumption; • domestic and foreign governmental regulations and taxes; • the impact of energy conservation efforts; • the continued threat of terrorism and the impact of military and other action, including the Russia-Ukraine war and its destabilizing effect on the European continent and the global oil and natural gas markets; • the price and availability of competitors’ supplies of oil and natural gas and alternative fuels; and • overall domestic and global economic conditions.
Historically, oil and natural gas prices have been volatile and fluctuate in response to changes in supply and demand, market uncertainty, and other factors that are beyond our control, including: • the regional, domestic and foreign supply of oil, natural gas and NGLs; • the level of commodity prices and expectations about future commodity prices; 22 Table of Contents • the level of global oil and natural gas exploration and production; • localized supply and demand fundamentals, including the proximity and capacity of pipelines and other transportation facilities, and other factors that result in differentials to benchmark prices from time to time; • the cost of exploring for, developing, producing and transporting oil, natural gas and NGLs; • the price and quantity of foreign imports; • political and economic conditions in oil producing countries, including conflicts in or among the Middle East, Africa, South America and Russia; • the ability of members of the Organization of Petroleum Exporting Countries to agree to and maintain oil price and production controls; • speculative trading in crude oil and natural gas derivative contracts; • the level of consumer product demand; • weather conditions and other natural disasters; • risks associated with operating drilling rigs; • technological advances affecting exploration and production operations and overall energy consumption; • domestic and foreign governmental regulations and taxes; • the impact of energy conservation efforts; • the continued threat of terrorism and the impact of military and other action, including the Russia-Ukraine war and its destabilizing effect on the European continent and the global oil and natural gas markets; • the price and availability of competitors’ supplies of oil and natural gas and alternative fuels; and • overall domestic and global economic conditions.
In addition, our future capital needs may require us to issue additional equity or debt securities that may dilute our stockholders or introduce covenants that may restrict our operations or ability to pay dividends. • We are subject to complex federal, state, local and other laws, regulations and permits that could adversely affect the cost, manner, ability or feasibility of conducting our operations. • Climate change legislation or regulations restricting emissions of “greenhouse gases,” or GHGs, could result in increased operating costs and reduced demand for the oil, natural gas and NGLs we expect to produce. • If engaged in intrastate common carrier operations, our financial results with respect to the Pipelines will primarily depend on the outcomes of ratemaking proceedings with the California Public Utilities Commission and we may not be able to earn an adequate rate of return in a timely manner or at all. • Attempts by the California state government to restrict the production of oil and gas could negatively impact our operations and result in decreased demand for fossil fuels in California. • Our assets are located exclusively onshore and offshore in California, making us vulnerable to risks associated with having operations concentrated in this geographic area. • All of our operations are conducted in areas that may be at risk of damage from fire, mudslides, earthquakes or other natural disasters. • We may be required to post cash collateral pursuant to our agreements with sureties, letter of credit providers or regulators under our existing or future bonding or other arrangements, which may have a material adverse effect on our liquidity and our ability to execute our capital expenditure plan and our asset retirement obligation plan and comply with the agreements governing our existing or future indebtedness. • Our business could be negatively affected by security threats, including cybersecurity threats, destructive forms of protest and opposition by activists and other disruptions. • The market prices of our securities could be highly volatile or may decline regardless of our operating performance.
In addition, our future capital needs may require us to issue additional equity or debt securities that may dilute our stockholders or introduce covenants that may restrict our operations or ability to pay dividends. • We are subject to complex federal, state, local and other laws, regulations and permits that could adversely affect the cost, manner, ability or feasibility of conducting our operations. • Climate change legislation or regulations restricting emissions of “greenhouse gases,” or GHGs, could result in increased operating costs and reduced demand for the oil, natural gas and NGLs we expect to produce. • If engaged in intrastate common carrier operations, our financial results with respect to the Pipelines will primarily depend on the outcomes of ratemaking proceedings with the CPUC and we may not be able to earn an adequate rate of return in a timely manner or at all. • Attempts by the California state government to restrict the production of oil and gas could negatively impact our operations and result in decreased demand for fossil fuels in California. • Our assets are located exclusively onshore and offshore in California, making us vulnerable to risks associated with having operations concentrated in this geographic area. • All of our operations are conducted in areas that may be at risk of damage from fire, mudslides, earthquakes or other natural disasters. • We may be required to post cash collateral pursuant to our agreements with sureties, letter of credit providers or regulators under our existing or future bonding or other arrangements, which may have a material adverse effect on our liquidity and our ability to execute our capital expenditure plan and our asset retirement obligation plan and comply with the agreements governing our existing or future indebtedness. • Our business could be negatively affected by security threats, including cybersecurity threats, destructive forms of protest and opposition by activists and other disruptions. • The market prices of our securities could be highly volatile or may decline regardless of our operating performance.
You may not be able to resell your shares at an attractive price due to a number of factors, such as the following: • actual or anticipated fluctuations in our quarterly financial results or the quarterly financial results of companies perceived to be similar to ours; • changes in the market’s expectations about our operating results; • the public’s reaction to our press releases, other public announcements and filings with the SEC; • speculation in the press or investment community; • actual or anticipated developments in our business, competitors’ businesses or the competitive landscape generally; 34 Table of Contents • our success in satisfying permitting and other regulatory requirements to restart production; • our success in satisfying permitting and other regulatory requirements to restart the Pipelines or obtain alternate transportation; • our ability to obtain water, drilling fluids and other critical resources; • the accuracy of our assumptions and estimates regarding the total costs associated with restarting and maintaining production and the Pipelines; • the market prices of oil, natural gas and NGL; • the success of our hedging strategy; • our ability to manage the safety risks associated with offshore development and production; • our success in retaining or recruiting, or changes required in, our officers, key employees or directors; • the outcome of ratemaking proceedings with the California Public Utilities Commission; • future laws and regulations related to climate change, GHGs and ESG and administrative interpretations thereof; • changes in the future operating results of the Company; • operating and stock price performance of other companies that investors deem comparable to ours; • changes in laws and regulations affecting our business; • commencement of, or involvement in, litigation involving the Company; • changes in our capital structure, such as future issuances of securities or the incurrence of additional debt; • the volume of our Common Stock available for public sale; • any major change in our Board or management; • sales of substantial amounts of our Common Stock by our directors, officers or significant stockholders or the perception that such sales could occur; and • other risk factors and other matters described or referenced under the sections “ Risk Factors ” and “ Cautionary Note Regarding Forward-Looking Statements .” Broad market and industry factors may materially harm the market price of our securities irrespective of our operating performance.
You may not be able to resell your shares at an attractive price due to a number of factors, such as the following: • actual or anticipated fluctuations in our annual financial results or the annual financial results of companies perceived to be similar to ours; 37 Table of Contents • changes in the market’s expectations about our operating results; • the public’s reaction to our press releases, other public announcements and filings with the SEC; • speculation in the press or investment community; • actual or anticipated developments in our business, competitors’ businesses or the competitive landscape generally; • our success in satisfying permitting and other regulatory requirements to restart production; • our success in satisfying permitting and other regulatory requirements to restart the Pipelines or obtain alternate transportation; • our ability to obtain water, drilling fluids and other critical resources; • the accuracy of our assumptions and estimates regarding the total costs associated with restarting and maintaining production and the Pipelines; • the market prices of oil, natural gas and NGL; • the success of our hedging strategy; • our ability to manage the safety risks associated with offshore development and production; • our success in retaining or recruiting, or changes required in, our officers, key employees or directors; • the outcome of ratemaking proceedings with the California Public Utilities Commission; • future laws and regulations related to climate change, GHGs and ESG and administrative interpretations thereof; • changes in the future operating results of the Company; • operating and stock price performance of other companies that investors deem comparable to ours; • changes in laws and regulations affecting our business; • commencement of, or involvement in, litigation involving the Company; • changes in our capital structure, such as future issuances of securities or the incurrence of additional debt; • the volume of our Common Stock available for public sale; • any major change in our Board or management; • sales of substantial amounts of our Common Stock by our directors, officers or significant stockholders or the perception that such sales could occur; and • other risk factors and other matters described or referenced under the sections “ Risk Factors ” and “ Cautionary Note Regarding Forward-Looking Statements .” Broad market and industry factors may materially harm the market price of our securities irrespective of our operating performance.
We do not own all of the land on which our assets are located or all of the land that we must traverse in order to conduct our operations. There are disputes with respect to certain of the rights-of-way or other interests and any unfavorable outcomes of such disputes could require us to incur additional costs.
There are disputes with respect to certain of the rights-of-way or other interests and any unfavorable outcomes of such disputes could require us to incur additional costs. We do not own in fee all of the land on which our assets are located or all of the land that we must traverse in order to conduct our operations.
Our development and production operations may be curtailed, delayed, canceled or otherwise negatively impacted as a result of many factors, including: • high costs, shortages or delivery delays of rigs, equipment, labor, electrical power or other services; • unusual or unexpected geological formations; • composition of sour natural gas, including sulfur, carbon dioxide and other diluent content; • unexpected operational events and conditions; • failure of down hole equipment and tubulars; • loss of wellbore mechanical integrity; • failure, unavailability or shortage of capacity of gathering and transportation pipelines, or other transportation facilities; • human errors, facility or equipment malfunctions and equipment failures or accidents, including acceleration of deterioration of our facilities and equipment due to the highly corrosive nature of sour natural gas; • excessive wall loss or other loss of pipeline integrity; • title problems; • litigation, including landowner lawsuits; • loss of drilling fluid circulation; • hydrocarbon or oilfield chemical spills; • fires, blowouts, surface craterings and explosions; • surface spills or underground migration due to uncontrollable flows of oil, natural gas, formation water or well fluids; • delays imposed by or resulting from compliance with environmental and other governmental or regulatory requirements; • delays due to operations in environmentally sensitive areas; and • adverse weather conditions and natural disasters.
Our development and production operations may be curtailed, delayed, canceled or otherwise negatively impacted as a result of many factors, including: • high costs, shortages or delivery delays of rigs, equipment, labor, electrical power or other services; • unusual or unexpected geological formations; • composition of sour natural gas, including sulfur, carbon dioxide and other diluent content; • unexpected operational events and conditions; • failure of down hole equipment and tubulars; • loss of wellbore mechanical integrity; • failure, unavailability or shortage of capacity of gathering and transportation pipelines, or other transportation facilities; • human errors, facility or equipment malfunctions and equipment failures or accidents, including acceleration of deterioration of our facilities and equipment due to the highly corrosive nature of sour natural gas; • excessive wall loss or other loss of pipeline integrity; • title problems; 24 Table of Contents • litigation, including landowner lawsuits; • loss of drilling fluid circulation; • hydrocarbon or oilfield chemical spills; • fires, blowouts, surface craterings and explosions; • surface spills or underground migration due to uncontrollable flows of oil, natural gas, formation water or well fluids; • delays imposed by or resulting from compliance with environmental and other governmental or regulatory requirements; • delays due to operations in environmentally sensitive areas; and • adverse weather conditions and natural disasters.
Many of these risks are heightened for us due to the fact that most of our equipment has been shut-in for more than eight years. • The enactment of derivatives legislation could have an adverse effect on our ability to use derivative instruments to reduce the effect of commodity price, interest rate and other risks associated with our business. • Development and production of oil, natural gas and NGLs in offshore waters have inherent and historically higher risk than similar activities onshore. • Oil and natural gas producers’ operations are substantially dependent on the availability of water and the disposal of waste, including produced water and drilling fluids.
Many of these risks are heightened for us due to the fact that most of our equipment has been shut-in for more than nine years. • The enactment of derivatives legislation could have an adverse effect on our ability to use derivative instruments to reduce the effect of commodity price, interest rate and other risks associated with our business. • Development and production of oil, natural gas and NGLs in offshore waters have inherent and historically higher risk than similar activities onshore. • Oil and natural gas producers’ operations are substantially dependent on the availability of water and the disposal of waste, including produced water and drilling fluids.
At this time, we cannot predict the potential future actions that may result from these orders or how such actions might potentially impact our operations. 31 Table of Contents In February 2021, California State Senators Scott Wiener and Monique Limón introduced Senate Bill 467, which proposes to halt the issuance or renewal of permits for hydraulic fracturing, acid well stimulation treatments, cyclic steaming, and water and steam flooding starting January 1, 2022, and then prohibit these extraction methods entirely starting January 1, 2027.
At this time, we cannot predict the potential future actions that may result from these orders or how such actions might potentially impact our operations. 33 Table of Contents In February 2021, California State Senators Scott Wiener and Monique Limón introduced Senate Bill 467, which proposes to halt the issuance or renewal of permits for hydraulic fracturing, acid well stimulation treatments, cyclic steaming, and water and steam flooding starting January 1, 2022, and then prohibit these extraction methods entirely starting January 1, 2027.
If actual decommissioning costs exceed such estimates, or we are required to provide a significant amount of collateral in cash or other security as a result of a revision to such estimates, our financial condition, results of operations and cash flows may be materially adversely affected. 33 Table of Contents We may be required to post cash collateral pursuant to our agreements with sureties, letter of credit providers or regulators under our existing or future bonding or other arrangements, which may have a material adverse effect on our liquidity and our ability to execute our capital expenditure plan and our asset retirement obligation plan and comply with the agreements governing our existing or future indebtedness.
If actual decommissioning costs exceed such estimates, or we are required to provide a significant amount of collateral in cash or other security as a result of a revision to such estimates, our financial condition, results of operations and cash flows may be materially adversely affected. 36 Table of Contents We may be required to post cash collateral pursuant to our agreements with sureties, letter of credit providers or regulators under our existing or future bonding or other arrangements, which may have a material adverse effect on our liquidity and our ability to execute our capital expenditure plan and our asset retirement obligation plan and comply with the agreements governing our existing or future indebtedness.
We will be required to make a formal assessment of the effectiveness of our internal control over financial reporting and, after we cease to be an emerging growth company, we will be required to include an attestation report on internal control over financial reporting issued by our independent registered public accounting firm.
We are required to make a formal assessment of the effectiveness of our internal control over financial reporting and, after we cease to be an emerging growth company, we will be required to include an attestation report on internal control over financial reporting issued by our independent registered public accounting firm.
If we do not have sufficient cash on hand or are unable to obtain additional funding on a timely basis, we may be unable to restart production of SYU, which could materially affect our business, financial condition and results of operations.
If we do not have sufficient cash on hand or are unable to obtain additional funding on a timely basis, we may be unable to restart production, which could materially affect our business, financial condition and results of operations.
The trading price of our Common Stock will depend on many factors, including those described in this “ Risk Factors ” section, many of which are beyond our control and may not be related our operating performance.
The trading price of our Common Stock will depend on many factors, including those described in this “ Risk Factors ” section, many of which are beyond our control and may not be related to our operating performance.
The outstanding principal amount under our Term Loan Agreement bears interest at a fixed rate and we have the option of capitalizing the interest onto the principal rather than paying cash interest, but we may in the future refinance our existing indebtedness or incur new indebtedness with variable rates and mandatory cash interest payments, which would expose us to interest rate risk and additional liquidity burdens.
The outstanding principal amount under our Senior Secured Term Loan Agreement bears interest at a fixed rate and we have the option of capitalizing the interest onto the principal rather than paying cash interest, but we may in the future refinance our existing indebtedness or incur new indebtedness with variable rates and mandatory cash interest payments, which would expose us to interest rate risk and additional liquidity burdens.
These laws and regulations may impose numerous obligations applicable to our operations, including the ability to obtain a permit before conducting our operations, including regulated drilling activities; the restriction of types, quantities and concentrations of materials that can be released or discharged into or through the environment; the limitation or prohibition of drilling, production and transportation activities on certain lands lying within wilderness, wetlands, seismically active areas and other protected or preserved areas; the application of specific health and safety criteria addressing worker protection; and the imposition of substantial liabilities for pollution and natural resources damages potentially resulting from our operations.
These laws and regulations may impose numerous obligations applicable to our operations, 30 Table of Contents including the ability to obtain a permit before conducting our operations, including regulated drilling activities; the restriction of types, quantities and concentrations of materials that can be released or discharged into or through the environment; the limitation or prohibition of drilling, production and transportation activities on certain lands lying within wilderness, wetlands, seismically active areas and other protected or preserved areas; the application of specific health and safety criteria addressing worker protection; and the imposition of substantial liabilities for pollution and natural resources damages potentially resulting from our operations.
There is no assurance that any of the petroleum contained in the SYU Assets will ever be recovered or reclassified as “reserves.” The resources are contingent upon (1) approval from federal, state and local regulators to restart production, (2) reestablishment of oil transportation systems to deliver production to market and (3) commitment to restart the wells and facilities.
There is no assurance that any of the petroleum contained in the SYU Assets will ever be recovered or reclassified as “reserves.” The resources are contingent upon (1) approval and/or inspection by from federal, state and local regulators to restart production, (2) reestablishment of oil transportation systems to deliver production to market and (3) commitment to restart the wells and facilities.
During the pendency of the Term Loan Agreement and in case of an event of default thereunder, EM may exercise all remedies at law or equity, and may foreclose upon substantially all of our assets and the assets of our subsidiaries, including, in the event of a deficiency, cash and any other assets not acquired from EM in the Business Combination to the extent constituting collateral under the applicable financing documents.
During the pendency of the Senior Secured Term Loan Agreement and in case of an event of default thereunder, EM may exercise all remedies at law or equity, and may foreclose upon substantially all of our assets and the assets of our subsidiaries, including, in the event of a deficiency, cash and any other assets not acquired from EM in the Business Combination to the extent constituting collateral under the applicable financing documents.
Also see “ Risk Factors—Risks Related to the Business of the Company-Attempts by the California state government to restrict the production of oil and gas could negatively impact our operations and result in decreased demand for fossil fuels in California .” If engaged in intrastate common carrier operations, our financial results with respect to the Pipelines will primarily depend on the outcomes of ratemaking proceedings with the California Public Utilities Commission and we may not be able to earn an adequate rate of return in a timely manner or at all.
Also see “ Risk Factors—Risks Related to the Business of the Company-Attempts by the California state government to restrict the 32 Table of Contents production of oil and gas could negatively impact our operations and result in decreased demand for fossil fuels in California .” If engaged in intrastate common carrier operations, our financial results with respect to the Pipelines will primarily depend on the outcomes of ratemaking proceedings with the California Public Utilities Commission and we may not be able to earn an adequate rate of return in a timely manner or at all.
Restrictions on the ability to obtain water or dispose of waste may impact our operations. • The unavailability or high cost of rigs, equipment, supplies and crews could delay our operations, increase our costs and delay forecasted revenue. • The third parties on whom we rely for transportation services are subject to complex federal, state and other laws that could adversely affect the cost, manner or feasibility of conducting our business. 18 Table of Contents • Our business depends in part on pipelines, gathering systems and processing facilities owned by us or others.
Restrictions on the ability to obtain water or dispose of waste may impact our operations. • The unavailability or high cost of rigs, equipment, supplies and crews could delay our operations, increase our costs and delay forecasted revenue. • The third parties on whom we rely for transportation services are subject to complex federal, state and other laws that could adversely affect the cost, manner or feasibility of conducting our business. • Our business depends in part on pipelines, gathering systems and processing facilities owned by us or others.
For example, our ability to produce and sell oil from SYU will depend on the continued availability of the pipeline infrastructure between platforms, for delivery of that oil to shore, and for further delivery to market, and any unavailability of that pipeline infrastructure could cause us to shut in all or a portion of the production from the SYU properties for the length of such unavailability.
For example, our ability to produce and sell oil from SYU will depend on the continued availability of the pipeline infrastructure between platforms, for delivery of that oil to shore, and for further delivery to market, and any unavailability of that pipeline infrastructure could cause us to shut in all or a portion of the production from the SYU Assets for the length of such unavailability.
Restrictive covenants in the Term Loan Agreement impose significant operating and financial restrictions on us and our subsidiaries and we may be prevented from taking advantage of business opportunities that arise because of the limitations imposed on us by the Term Loan Agreement unless we gain EM’s consent.
Restrictive covenants in the Senior Secured Term Loan Agreement impose significant operating and financial restrictions on us and our subsidiaries and we may be prevented from taking advantage of business opportunities that arise because of the limitations imposed on us by the Senior Secured Term Loan Agreement unless we gain EM’s consent.
As a result, you may not receive any return on an investment in our Common Stock unless you sell your shares of our Common Stock for a price greater than that which you paid for it. 41 Table of Contents Item 1B. Unresolved Staff Comments Not applicable.
As a result, you may not receive any return on an investment in our Common Stock unless you sell your shares of our Common Stock for a price greater than that which you paid for it. Item 1B. Unresolved Staff Comments Not applicable. 42 Table of Contents
Additional risks and uncertainties not currently known to us or those we currently view to be immaterial may also materially and adversely affect our business, financial condition or results of operations Risk Factors Summary The following is a summary of the principal risks and uncertainties described in more detail in this annual report: • We need to satisfy a number of permitting obligations and other requirements before we can restart production of the SYU Assets.
Additional risks and uncertainties not currently known to us or those we currently view to be immaterial may also materially and adversely affect our business, financial condition or results of operations. 19 Table of Contents Risk Factors Summary The following is a summary of the principal risks and uncertainties described in more detail in this annual report: • We need to satisfy a number of permitting obligations and other requirements before we can restart production of the SYU Assets.
For example, for the five years ended December 31, 2023, the NYMEX-WTI oil futures price ranged from a high of $123.70 per Bbl to a low of $(37.63) per Bbl, while the NYMEX-Henry Hub natural gas futures price ranged from a high of $9.68 per MMBtu to a low of $1.48 per MMBtu.
For example, for the five years ended December 31, 2024, the NYMEX-WTI oil futures price ranged from a high of $123.70 per Bbl to a low of $(37.63) per Bbl, while the NYMEX-Henry Hub natural gas futures price ranged from a high of $9.68 per MMBtu to a low of $1.48 per MMBtu.
Under the terms of the Term Loan Agreement, restarting production will trigger a springing maturity date following a specified grace period, and the terms on which we will be able to refinance the Term Loan Agreement, if necessary, will depend on then-prevalent market conditions.
Under the terms of the Senior Secured Term Loan Agreement, restarting production will trigger a springing maturity date following a specified grace period, and the terms on which we will be able to refinance the Senior Secured Term Loan Agreement, if necessary, will depend on then-prevalent market conditions.
On August 16, 2022, President Biden signed into law the Inflation Reduction Act (the “ IRA ”), which targets methane from oil and gas sources by imposing an applicable “waste emissions charge” on petroleum and natural gas production facilities that exceed a specified waste emissions threshold and requiring the reporting of emissions that exceed 25,000 metric tons of carbon dioxide equivalent per year.
On August 16, 2022, President Biden signed into law the Inflation Reduction Act (the “IRA”), which targets methane from oil and gas sources by imposing an applicable “waste emissions charge” on petroleum and natural gas production facilities that exceed a specified waste emissions threshold and requiring the reporting of emissions that exceed 25,000 metric tons of carbon dioxide equivalent per year.
SYU suspended production as a result of the Line 901 incident and consequent suspension of service, and our business depends on its production restarting. We need to satisfy a number of requirements related to SYU and Lines 901 and 903 before we can restart production.
Production was suspended as a result of the Line 901 incident and consequent suspension of service, and our business depends on its production restarting. We need to satisfy a number of requirements related to the SYU Assets and Lines 901 and 903 before we can restart production.
Any inability to compete effectively with larger companies could have a material adverse impact on our business activities, financial condition, results of operations and cash flows. 28 Table of Contents We are subject to complex federal, state, local and other laws, regulations and permits that could adversely affect the cost, manner, ability or feasibility of conducting our operations.
Any inability to compete effectively with larger companies could have a material adverse impact on our business activities, financial condition, results of operations and cash flows. We are subject to complex federal, state, local and other laws, regulations and permits that could adversely affect the cost, manner, ability or feasibility of conducting our operations.
Additionally, the Senior Secured Term Loan Agreement (the “Term Loan Agreement”), dated as of the Closing Date by and among Sable, EMC, as lender, and Alter Domus Products Corp., as the administrative agent for the benefit of the lender, requires that James C.
Additionally, the Senior Secured Term Loan Agreement (the “Senior Secured Term Loan Agreement”), dated as of the Closing Date by and among Sable, EMC, as lender, and Alter Domus Products Corp., as the administrative agent for the benefit of the lender, requires that James C.
The operations of the third parties on whom we rely for transportation services are subject to complex and stringent laws and regulations that require obtaining and maintaining numerous permits, approvals and certifications from various federal, state and local government authorities. These third parties may incur substantial costs in order to comply with existing laws and regulations.
The operations of the third parties on whom we rely for transportation services are subject to complex and stringent laws and regulations that require obtaining and maintaining numerous permits, approvals and certifications from various federal, 26 Table of Contents state and local government authorities. These third parties may incur substantial costs in order to comply with existing laws and regulations.
If we do not have sufficient cash on hand to restart production of SYU, we may need to raise additional capital to continue our operations, and this capital may not be available on acceptable terms or at all.
If we do not have sufficient cash on hand to restart production, we may need to raise additional capital to continue our operations, and this capital may not be available on acceptable terms or at all.
See “ Risk Factors—Risks Related to the Business of the Company-We may be unable to restart production of SYU by January 1, 2026, which would permit EM to exercise a reassignment option and take ownership of SYU without any compensation or reimbursement other than the deemed repayment in full of the principal and accrued interest outstanding under the Term Loan Agreement .” Risks Related to the Business of the Company Oil, natural gas and natural gas liquids, or “NGL(s)”, prices are volatile, due to factors beyond our control, and greatly affect our business, results of operations and financial condition.
See “ Risk Factors—Risks Related to the Business of the Company-We may be unable to Restart Production of the SYU Assets by March 1, 2026, which would permit EM to exercise a reassignment option and take ownership of the SYU Assets without any compensation or reimbursement other than the deemed repayment in full of the principal and accrued interest outstanding under the Senior Secured Term Loan Agreement .” Risks Related to the Business of the Company Oil, natural gas and natural gas liquids, or “NGL(s)”, prices are volatile, due to factors beyond our control, and greatly affect our business, results of operations and financial condition.
Our 30 Table of Contents ability to mitigate the adverse physical impacts of climate change depends in part upon our disaster preparedness and response and business continuity planning. See “ Business—Environmental, Occupational Safety and Health Matters and Regulations-Regulation of ‘Greenhouse Gas’ Emissions ” for a description of the climate change laws and regulations that affect us.
Our ability to mitigate the adverse physical impacts of climate change depends in part upon our disaster preparedness and response and business continuity planning. See “ Business—Environmental, Occupational Safety and Health Matters and Regulations-Regulation of ‘Greenhouse Gas’ Emissions ” for a description of the climate change laws and regulations that affect us.
A future natural disaster, such as a fire, mudslide or an earthquake, could cause substantial interruption and delays in our operations, damage or destroy equipment, prevent or delay transport of our products and cause us to incur additional expenses, which would adversely affect our business, financial condition and results of operations.
A future natural disaster, such as a fire, mudslide or an earthquake, could cause substantial interruption and delays in our operations, damage or destroy equipment, prevent or delay transport of our products and cause us to incur additional expenses, which would adversely affect our business, financial condition and results of 34 Table of Contents operations.
If any such effects were to occur in sufficient proximity to the SYU facilities, they could have an adverse effect on our financial condition and results of operations.
If any such effects were to occur in sufficient proximity to our facilities, they could have an adverse effect on our financial condition and results of operations.
The prices that we expect to receive for our future oil and natural gas production will often reflect a regional discount, based on the location of production, to the relevant benchmark prices, such as NYMEX or ICE, that are used for calculating hedge positions.
The prices that we expect to receive for our future oil and natural gas production will often reflect a regional discount, based on the location of production, to the relevant benchmark prices, such as NYMEX or ICE, that are used for 23 Table of Contents calculating hedge positions.
See “ Risk Factors—Risks Related to the Business of the Company-We may be unable to restart production of SYU by January 1, 2026, which would permit EM to exercise a reassignment option and take ownership of SYU without any compensation or reimbursement other than the deemed repayment in full of the principal and accrued interest outstanding under the Term Loan Agreement .” Our assumptions and estimates regarding the total costs associated with restarting production may be inaccurate.
See “ Risk Factors—Risks Related to the Business of the Company-We may be unable to Restart Production of SYU Assets by March 1, 2026, which would permit EM to exercise a reassignment option and take ownership of the SYU Assets without any compensation or reimbursement other than the deemed repayment in full of the principal and accrued interest outstanding under the Senior Secured Term Loan Agreement .” Our assumptions and estimates regarding the total costs associated with restarting production may be inaccurate.
The prices we expect to receive for our future production are also affected by the specific characteristics of the production relative to 21 Table of Contents production sold at benchmark prices. For example, California oil typically has a lower gravity, and a portion typically has higher sulfur content, than oil sold at certain benchmark prices.
The prices we expect to receive for our future production are also affected by the specific characteristics of the production relative to production sold at benchmark prices. For example, California oil typically has a lower gravity, and a portion typically has higher sulfur content, than oil sold at certain benchmark prices.
The methane emissions charge started in calendar year 2024 at $900 per ton of methane, will increase to $1,200 in 2025, and be set at $1,500 for 2026 and each year thereafter. Calculation of the fee is based on certain thresholds established in the IRA.
The methane emissions charge started in calendar year 2024 at $900 per ton of methane, has increased to $1,200 in 2025, and will be set at $1,500 for 2026 and each year thereafter. Calculation of the fee is based on certain thresholds established in the IRA.
We intend to retain future earnings, if any, for future operations, expansion and debt repayment and there are no current plans (at least until the restart of production at SYU and the repayment or refinancing of the Term Loan Agreement) to pay any cash dividends for the foreseeable future.
We intend to retain future earnings, if any, for future operations, expansion and debt repayment and there are no current plans (at least until the restart of production of the SYU Assets and the repayment or refinancing of the Senior Secured Term Loan Agreement) to pay any cash dividends for the foreseeable future.
There are disputes with respect to certain of the rights-of-way or other interests and any unfavorable outcomes of such disputes could require us to incur additional costs. • We may be unable to restart production by January 1, 2026, which would permit EM to exercise a reassignment option and take ownership of SYU without any compensation or reimbursement other than the deemed repayment in full of the principal and accrued interest outstanding under the Term Loan Agreement. • Restrictive covenants in the Term Loan Agreement or any future agreements governing our indebtedness could limit our growth and our ability to finance our operations, fund our capital needs, respond to changing conditions and engage in other business activities that may be in our best interests. • Under the terms of the Term Loan Agreement, restarting production will trigger a springing maturity date following a specified grace period, and the terms on which we will be able to refinance the Term Loan Agreement, if necessary, will depend on then-prevalent market conditions. • Our business plans require a significant amount of capital.
There are disputes with respect to certain of the rights-of-way or other interests and any unfavorable outcomes of such disputes could require us to incur additional costs. 20 Table of Contents • We may be unable to Restart Production by March 2026, which would permit EM to exercise a reassignment option and take ownership of the SYU Assets without any compensation or reimbursement other than the deemed repayment in full of the principal and accrued interest outstanding under the Senior Secured Term Loan Agreement. • Restrictive covenants in the Senior Secured Term Loan Agreement or any future agreements governing our indebtedness could limit our growth and our ability to finance our operations, fund our capital needs, respond to changing conditions and engage in other business activities that may be in our best interests. • Under the terms of the Senior Secured Term Loan Agreement, restarting production will trigger a springing maturity date following a specified grace period, and the terms on which we will be able to refinance the Senior Secured Term Loan Agreement, if necessary, will depend on then-prevalent market conditions. • Our business plans require a significant amount of capital.
Many of these risks are heightened for us due to the fact that most of our equipment has been shut-in for more than eight years.
Many of these risks are heightened for us due to the fact that most of our equipment has been shut-in for more than nine years.
The terms on which we would be able to obtain any refinancing of the Term Loan Agreement will depend on market conditions at the time of any such refinancing.
The terms on which we would be able to obtain any refinancing of the Senior Secured Term Loan Agreement will depend on market conditions at the time of any such refinancing.
Negative public perception regarding us and/or our industry resulting from, among other things, concerns raised by advocacy groups about climate change, may also lead to increased litigation risk, and regulatory, legislative and judicial scrutiny, which may, in turn, lead to new state and federal safety and environmental laws, regulations, guidelines and enforcement interpretations.
Negative public perception regarding us and/or our industry resulting from, among other things, concerns raised by advocacy groups about climate change, may also lead to increased litigation risk, and regulatory, legislative and judicial scrutiny, which may, in turn, lead 31 Table of Contents to new state and federal safety and environmental laws, regulations, guidelines and enforcement interpretations.
Subject to the satisfaction of vesting conditions and the expiration of any applicable lockup restrictions, shares 37 Table of Contents registered under the registration statement on Form S-8 will generally be available for resale immediately in the public market without restriction.
Subject to the satisfaction of vesting conditions and the expiration of any applicable lockup restrictions, shares registered under the registration statement on Form S-8 will generally be available for resale immediately in the public market without restriction.
If we fail to restart production by January 1, 2026, the prior owner of SYU may exercise its right to cause us to reassign the SYU Assets.
If we fail to restart production by March 1, 2026, the prior owner of the SYU Assets may exercise its right to cause us to reassign the SYU Assets.
The Dodd-Frank Wall Street Reform and Consumer Protection Act (“ Dodd-Frank Act ”), enacted in 2010, establishes federal oversight and regulation of, among other things, the over-the-counter derivatives market and certain participants in that market, including us.
The Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”), enacted in 2010, establishes federal oversight and regulation of, among other things, the over-the-counter derivatives market and certain participants in that market, including us.
The potential consequences of these hazards are particularly severe for us because significant portions of our offshore operations are conducted in environmentally sensitive areas, including areas with significant residential populations and public and commercial infrastructure.
The potential consequences of these hazards are particularly 25 Table of Contents severe for us because significant portions of our offshore operations are conducted in environmentally sensitive areas, including areas with significant residential populations and public and commercial infrastructure.
Such laws, regulations or rules and their interpretation and application may also change from time to time and such changes could have a material adverse effect on our business, investments and results of operations.
Such laws, 41 Table of Contents regulations or rules and their interpretation and application may also change from time to time and such changes could have a material adverse effect on our business, investments and results of operations.
See “ Risk Factors—Risks Related to the Restart of Production .” 26 Table of Contents Restrictive covenants in the Term Loan Agreement or any future agreements governing our indebtedness could limit our growth and our ability to finance our operations, fund our capital needs, respond to changing conditions and engage in other business activities that may be in our best interests.
See “ Risk Factors—Risks Related to the Restart of Production .” Restrictive covenants in the Senior Secured Term Loan Agreement or any future agreements governing our indebtedness could limit our growth and our ability to finance our operations, fund our capital needs, respond to changing conditions and engage in other business activities that may be in our best interests.
We may be unable to restart production by January 1, 2026, which would permit EM to exercise a reassignment option and take ownership of SYU without any compensation or reimbursement other than the deemed repayment in full of the principal and accrued interest outstanding under the Term Loan Agreement.
We may be unable to Restart Production by March 1, 2026, which would permit EM to exercise a reassignment option and take ownership of the SYU Assets without any compensation or reimbursement other than the deemed repayment in full of the principal and accrued interest outstanding under the Senior Secured Term Loan Agreement.
The Clean Water Act and similar state laws provide for civil, criminal and administrative penalties for any unauthorized 24 Table of Contents discharges of pollutants and unauthorized discharges of reportable quantities of oil and other hazardous substances.
The Clean Water Act and similar state laws provide for civil, criminal and administrative penalties for any unauthorized discharges of pollutants and unauthorized discharges of reportable quantities of oil and other hazardous substances.
The Incentive Plan will provide for automatic increases in the shares reserved for grant or issuance under the plan which could result in additional dilution to our stockholders.
The Incentive Plan provides for automatic increases in the shares reserved for grant or issuance under the plan which could result in additional dilution to our stockholders.
The declaration, amount and payment of any future dividends on shares of our Common Stock will be at the 40 Table of Contents sole discretion of our Board and subject to restrictions and limitations in the Term Loan Agreement or any other then-existing indebtedness of the Company.
The declaration, amount and payment of any future dividends on shares of our Common Stock will be at the sole discretion of our Board and subject to restrictions and limitations in the Senior Secured Term Loan Agreement or any other then-existing indebtedness of the Company.
The Term Loan Agreement includes a springing maturity date of ninety (90) days after Restart Production (as defined in the Sable-EM Purchase Agreement) (i.e., one hundred eighty (180) days after resumption of actual production from the wells), which could require a future refinancing of the indebtedness under the Term Loan Agreement or the incurrence of new indebtedness.
The Senior Secured Term Loan Agreement includes a springing maturity date of ninety (90) days after Restart Production (as defined in the Sable-EM Purchase Agreement) (i.e., two hundred forty (240) days after resumption of actual production from the wells), which could require a future refinancing of the indebtedness under the Senior Secured Term Loan Agreement or the incurrence of new indebtedness.
These fluctuations may occur due to a variety of factors, many of which are outside of our control, including, but not limited to: • the costs associated with restarting and maintaining production and the Pipelines; • the market prices of oil, natural gas and NGL; • the success of our hedging strategy; • future accounting pronouncements or changes in our accounting policies; • macroeconomic conditions, both nationally and locally; and • any other change in the competitive landscape of our industry, including consolidation among our competitors or partners. 39 Table of Contents The cumulative effects of these factors could result in large fluctuations and unpredictability in our quarterly and annual operating results.
These fluctuations may occur due to a variety of factors, many of which are outside of our control, including, but not limited to: • the costs associated with restarting and maintaining production and the Pipelines; • the market prices of oil, natural gas and NGL; • the success of our hedging strategy; • future accounting pronouncements or changes in our accounting policies; • macroeconomic conditions, both nationally and locally; and • any other change in the competitive landscape of our industry, including consolidation among our competitors or partners.
Any limitation in the availability of those facilities could interfere with our ability to market our oil, natural gas and NGL production. • Our independent registered public accounting firm’s report contains an explanatory paragraph that expresses substantial doubt about our ability to continue as a “going concern.” • Loss of our key executive officers or other key personnel, or an inability to attract and retain such officers and personnel, could negatively affect our business and, in one instance, could cause a default under the primary agreement governing our existing indebtedness. • We may incur losses as a result of title defects or deficiencies in our properties. • We do not own all of the land on which our assets are located or all of the land that we must traverse in order to conduct our operations.
Any limitation in the availability of those facilities could interfere with our ability to market our oil, natural gas and NGL production. • Loss of our key executive officers or other key personnel, or an inability to attract and retain such officers and personnel, could negatively affect our business and, in one instance, could cause a default under the primary agreement governing our existing indebtedness. • We may incur losses as a result of title defects or deficiencies in our properties. • We do not own all of the land on which our assets are located or all of the land that we must traverse in order to conduct our operations.
These restrictions limit our ability to, among other things: • engage in mergers, consolidations, liquidations, or dissolutions; • create or incur debt or liens; • make certain debt prepayments; • pay dividends, distributions, management fees or certain other restricted payments; • make investments, acquisitions, loans, or purchase oil and gas properties; • sell, assign, farm-out or dispose of any property; • enter into transactions with affiliates; • enter into, subject to certain exceptions, any agreement that prohibits or restricts liens securing the Term Loan Agreement, payments of dividends to us, or payment of debt owed to us and our subsidiaries; and • change the nature of our business.
These restrictions limit our ability to, among other things: • engage in mergers, consolidations, liquidations, or dissolutions; • create or incur debt or liens; • make certain debt prepayments; • pay dividends, distributions, management fees or certain other restricted payments; • make investments, acquisitions, loans, or purchase oil and gas properties; • sell, assign, farm-out or dispose of any property; • enter into transactions with affiliates; • enter into, subject to certain exceptions, any agreement that prohibits or restricts liens securing the Senior Secured Term Loan Agreement, payments of dividends to us, or payment of debt owed to us and our subsidiaries; and • change the nature of our business. 28 Table of Contents The Senior Secured Term Loan Agreement also contains representations and warranties, affirmative covenants, additional negative covenants and events of default (including a change of control).
These material weaknesses could continue to adversely affect investor confidence in us and materially adversely affect our ability to report our results of operations and financial condition accurately and in a timely manner. 19 Table of Contents • If we fail to develop and maintain an effective system of disclosure controls and internal control over financial reporting, our ability to produce timely and accurate financial statements or comply with applicable regulations could be impaired, which may adversely affect investor confidence in us and, as a result, the market price of our Common Stock.
These material weaknesses could continue to adversely affect investor confidence in us and materially adversely affect our ability to report our results of operations and financial condition accurately and in a timely manner. • If we fail to develop and maintain an effective system of disclosure controls and internal control over financial reporting, our ability to produce timely and accurate financial statements or comply with applicable regulations could be impaired, which may adversely affect investor confidence in us and, as a result, the market price of our Common Stock. 21 Table of Contents Risks Related to Restart of Production We need to satisfy a number of permitting obligations and other requirements before we can restart production of the SYU Assets.
If any action, the subject matter of which is within the scope of the forum provisions of the warrant agreement, is filed in a court other than a court of the State of New York or the United States District Court for the Southern District of New York (a “ foreign action ”) in the name of any holder of our warrants, such holder will be deemed to have consented to: (x) the personal jurisdiction of the state and federal courts located in the State of New York in connection with any action brought in any such court to enforce the forum provisions (an “ enforcement action ”), and (y) having service of process made upon such Warrant Holder in any such enforcement action by service upon such Warrant Holder’s counsel in the foreign action as agent for such Warrant Holder.
If any action, the subject matter of which is within the scope of the forum provisions of the warrant agreement, is filed in a court other than a court of the State of New York or the United States District Court for the Southern District of New York (a “ foreign action ”) in the name of any holder of our warrants, such holder will be deemed to have consented to: (x) the personal jurisdiction of the state and federal courts located in the State of New York in connection with any action brought in any such court to enforce the forum provisions (an “ enforcement action ”), and (y) having service of process made upon such Warrant Holder in any such enforcement action by service upon such Warrant Holder’s counsel in the foreign action as agent for such Warrant Holder. 40 Table of Contents This choice-of-forum provision may limit a Warrant Holder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with our company, which may discourage such lawsuits.
While we have done extensive title diligence in advance of the Business Combination and typically obtain title opinions prior to commencing drilling operations on a lease or in a unit, the failure of title or other defects or deficiencies may not be discovered until after a well is drilled, in which case we may lose the lease and the right to produce all or a portion of the minerals under the property.
While we have done extensive title diligence in advance of the Business Combination and typically obtain title opinions prior to commencing drilling operations on a lease or in a unit, the failure of title or other defects or deficiencies may not be discovered until after a well is drilled, in which case we may lose the lease and the right to produce all or a portion of the minerals under the property. 27 Table of Contents We do not own all of the land on which our assets are located or all of the land that we must traverse in order to conduct our operations.
If we fail to restart production of the SYU Assets by January 1, 2026 (the “ Restart Failure Date ”), then pursuant to the Purchase and Sale Agreement dated November 1, 2022, by and among Legacy Sable, EMC and MPPC relating to the purchase of SYU and the Pipelines (“ Sable-EM Purchase Agreement ”), for 180 days thereafter, EM will have the exclusive right, but not the obligation, to require us to reassign the SYU Assets and rights to EM or its designated representative, without reimbursing us for any of our costs or expenditures (the “ Reassignment Option ”).
If we fail to Restart Production (as defined in the Sable-EM Purchase Agreement) of the SYU Assets by March 1, 2026 (the “ Restart Failure Date ”), then pursuant to the Sable-EM Purchase Agreement, for 180 days thereafter, EM will have the exclusive right, but not the obligation, to require us to reassign the SYU Assets and rights to EM or its designated representative, without reimbursing us for any of our costs or expenditures (the “ Reassignment Option ”).
In the future, we may need to raise additional funds through the issuance of new equity or debt securities, or a combination thereof. Additional financing may not be available on favorable terms or at all.
In the future, we may need to raise additional funds through the issuance of new equity or debt securities, or a combination thereof. Additional financing may not be available on favorable terms or at all. If adequate funds are not available on acceptable terms, we may be unable to fund our capital requirements.
We intend to file a registration statement with the SEC on Form S-8 providing for the registration of shares of our Common Stock issued or reserved for issuance under the Sable Offshore Corp. 2023 Incentive Award Plan (the “ Incentive Plan ”).
We filed a registration statement on Form S-8 on April 19, 2024 providing for the registration of shares of our Common Stock issued or reserved for issuance under the Sable Offshore Corp. 2023 Incentive Award Plan (the “ Incentive Plan ”).
We may incur substantial losses and be subject to substantial liability claims as a result of catastrophic events. We may not be insured for, or our insurance may be inadequate to protect us against, these risks. Expenses not covered by our insurance could have a material adverse effect on our financial position and results of operations.
We may not be insured for, or our insurance may be inadequate to protect us against, these risks. Expenses not covered by our insurance could have a material adverse effect on our financial position and results of operations.
There has been increased focus by government agencies on such transactions, and we expect that increased focus to continue, and we may be subject to increased scrutiny by the SEC and other government agencies on holders of our securities as a result, which could adversely affect the price of our Common Stock.
There has been increased focus by government agencies on such transactions, and we expect that increased focus to continue, and we may be subject to increased scrutiny by the SEC and other government agencies on holders of our securities as a result, which could adversely affect the price of our Common Stock. 38 Table of Contents The NYSE may not continue to list our securities, which could limit investors’ ability to make transactions in our securities and subject us to additional trading restrictions.
We currently estimate the total costs we will incur in order to restart production to be approximately $197,000,000. The expenditures will primarily be directed toward obtaining the necessary regulatory approvals and completing the pipeline repairs and bringing the shut-in assets back online during the third quarter of 2024.
We currently estimate the total remaining start-up expenses of approximately $152.0 million to restart production. The expenditures will primarily be directed toward obtaining the necessary regulatory approvals and completing the pipeline repairs and bringing the shut-in assets back online during the second quarter of 2025.
If adequate funds are not available on acceptable terms, we may be unable to fund our capital requirements. 27 Table of Contents If we issue new debt, the debt holders would have rights senior to holders of our Common Stock to make claims on our assets and the terms of any debt could restrict our operations, including our ability to pay dividends on our Common Stock.
If we issue new debt, the debt holders would have rights senior to holders of our Common Stock to make claims on our assets and the terms of any debt could restrict our operations, including our ability to pay dividends on our Common Stock.
While we may participate in various voluntary frameworks and certification programs to improve the ESG profile of our operations and products, we cannot guarantee that such participation or certification will have the intended results on our or our products’ ESG profile. 32 Table of Contents Moreover, while we may create and publish voluntary disclosures regarding ESG matters from time to time, many of the statements in those voluntary disclosures will be based on hypothetical expectations and assumptions that may or may not be representative of current or actual risks or events or forecasts of expected risks or events, including the costs associated therewith.
Moreover, while we may create and publish voluntary disclosures regarding ESG matters from time to time, many of the statements in those voluntary disclosures will be based on hypothetical expectations and assumptions that may or may not be representative of current or actual risks or events or forecasts of expected risks or events, including the costs associated therewith.
On January 12, 2024, the EPA published a proposed rule to implement this waste emissions charge as required by the IRA. In addition to the IRA, almost one-half of the states have taken legal measures to reduce emissions of GHGs, including through the planned development of GHG emission inventories and/or regional GHGs cap and trade programs.
In addition to the IRA, almost one-half of the states have taken legal measures to reduce emissions of GHGs, including through the planned development of GHG emission inventories and/or regional GHGs cap and trade programs.
If any of these factors were to occur with respect to a particular field, we could lose all or a part of our investment in the field or we could fail to realize the expected benefits from the field, either of which could materially and adversely affect our business, financial condition, results of operations and cash flows. 23 Table of Contents The enactment of derivatives legislation could have an adverse effect on our ability to use derivative instruments to reduce the effect of commodity price, interest rate and other risks associated with our business.
If any of these factors were to occur with respect to a particular field, we could lose all or a part of our investment in the field or we could fail to realize the expected benefits from the field, either of which could materially and adversely affect our business, financial condition, results of operations and cash flows.
The U.S. Environmental Protection Agency (“ EPA ”), BOEM, BSEE, PHMSA, OSFM, California Department of Conservation’s Geologic Energy Management Division (“ CalGEM ”), and numerous other governmental authorities have the authority to enforce compliance with these laws and regulations and the permits issued by them, often requiring difficult and costly compliance measures or corrective actions.
The EPA, BOEM, BSEE, PHMSA, OSFM, CalGEM, Coastal Commission, CDFW, Regional Board, SLC and numerous other governmental authorities have the authority to enforce compliance with these laws and regulations and the permits issued by them, often requiring difficult and costly compliance measures or corrective actions.
In order for our securities to remain listed on the NYSE, we must maintain certain financial, distribution and stock price levels. 35 Table of Contents If the NYSE delists our securities from trading on its exchange and we are not able to list our securities on another national securities exchange, we expect our securities could be quoted on an over-the-counter market.
If the NYSE delists our securities from trading on its exchange and we are not able to list our securities on another national securities exchange, we expect our securities could be quoted on an over-the-counter market.
Although these legislative efforts have failed, it is possible that SB 467 or similar legislation could be reintroduced in the future and we cannot predict the results of such future efforts. On June 3, 2022, the U.S.
Although these legislative efforts have failed, it is possible that SB 467 or similar legislation could be reintroduced in the future and we cannot predict the results of such future efforts. On February 21, 2025, California State Assembly Member Hart introduced AB 1448 to the California State Legislature.
The listing of species in areas where we operate or, alternatively, entry into certain range-wide conservation planning agreements could result in increased costs to us from species protection measures, time delays or limitations on our activities, which costs, delays or limitations may be significant and could adversely affect our results of operations and financial position. 29 Table of Contents Conservation measures, technological advances and increasing public attention and activism with respect to climate change and environmental matters could reduce demand for oil, natural gas and NGLs and have an adverse effect on our business, financial condition and reputation.
The listing of species in areas where we operate or, alternatively, entry into certain range-wide conservation planning agreements could result in increased costs to us from species protection measures, time delays or limitations on our activities, which costs, delays or limitations may be significant and could adversely affect our results of operations and financial position.
As a result, holders of our Common Stock bear the risk that our future offerings may reduce the market price of our Common Stock and dilute their percentage ownership. We may redeem unexpired Public Warrants prior to their exercise at a time that is disadvantageous to Warrant Holders, thereby making their warrants worthless.
As a result, holders of our Common Stock bear the risk that our future offerings may reduce the market price of our Common Stock and dilute their percentage ownership.
As a result, comparing our operating results on a period-to-period basis may not be meaningful. Investors should not rely on past results as an indication of future performance. This variability and unpredictability could also result in us failing to meet the expectations of industry or financial analysts or investors for any period.
The cumulative effects of these factors could result in large fluctuations and unpredictability in our quarterly and annual operating results. As a result, comparing our operating results on a period-to-period basis may not be meaningful. Investors should not rely on past results as an indication of future performance.
Some or all of the contingent resources may be reclassified as “reserves” if all of the contingencies are successfully resolved but there is no assurance that the contingencies will be resolved or resolved in a timely manner or that any of the petroleum in the SYU Assets will be recovered. 22 Table of Contents Our hedging strategy in the future may not effectively mitigate the impact of commodity price volatility from our cash flows, and our hedging activities could result in cash losses and may limit potential gains.
Some or all of the contingent resources may be reclassified as “reserves” if all of the contingencies are successfully resolved but there is no assurance that the contingencies will be resolved or resolved in a timely manner or that any of the petroleum in the SYU Assets will be recovered.
There is no assurance that these groups will not be successful in delaying or preventing us from obtaining the required approvals through litigation or other actions. The Inflation Reduction Act of 2022 could accelerate the transition to a low carbon economy and will impose new costs on our operations. On August 16, 2022, President Biden signed into law the IRA.
The Inflation Reduction Act of 2022 could accelerate the transition to a low carbon economy and will impose new costs on our operations. On August 16, 2022, President Biden signed into law the IRA.
In addition, various states and local governments have vowed to continue to enact regulations to achieve the goals of the Paris Agreement.
On January 20, 2025, President Trump signed an executive order initiating the re-withdraw of the United States from the agreement. In addition, various states and local governments have vowed to continue to enact regulations to achieve the goals of the Paris Agreement.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeAs part of its oversight, our audit committee and certain members of the Company’s management will meet quarterly to discuss ongoing initiatives and to facilitate coordination between Company stakeholders.
Biggest changeAs part of its oversight, our audit committee and certain members of the Company’s management will meet quarterly to discuss ongoing initiatives and to facilitate coordination between Company stakeholders. Annually, our Vice President of Information Technology will review the Company’s cybersecurity risk management program with our audit committee and Board.
A successful attack on our information or operational technology systems could have material consequences for the Company. While we intend to devote resources to our security measures to protect our systems and information during 2024, these measures cannot provide absolute security. See “Item 1A.
A successful attack on our information or operational technology systems could have material consequences for the Company. While we intend to devote resources to our security measures to protect our systems and information during 2025, these measures cannot provide absolute security. See “Item 1A.
Item 1C. Cybersecurity Processes for Assessing, Identifying, and Managing Cybersecurity Risks Since the completion of the Business Combination on February 14, 2024, Management has been working to create a defined cybersecurity risk management program, but such program is not yet in place.
Item 1C. Cybersecurity Processes for Assessing, Identifying, and Managing Cybersecurity Risks Since the completion of the Business Combination on February 14, 2024, management has been working to create a defined cybersecurity risk management program, through the addition of enhanced applications to identify and mitigate risks.
Currently, the Company has a formal Cyber Incident Response Plan, which we intend to test periodically for effectiveness. No Previous Material Cybersecurity Threats As of the date of this report, we are not aware of any previous cybersecurity threats that have materially affected or are reasonably likely to materially affect the Company.
Management will complete implementation of the action items during 2025, which we intend to test periodically for effectiveness. No Previous Material Cybersecurity Threats As of the date of this report, we are not aware of any previous cybersecurity threats that have materially affected or are reasonably likely to materially affect the Company.
Removed
Currently, our Information Technology team works to monitor, assess, identify and respond to potential cybersecurity incidents that threaten the Company, but does not do so pursuant to a formal policy or program. We intend to fully implement a cybersecurity risk management program by the end of this year.
Added
During 2024 the Company engaged and managed an experienced third party vendor, specializing in cybersecurity, to conduct a Company wide cybersecurity risk assessment. The assessment included a multi-phase approach consisting of open-source intelligence gathering, network system penetration testing of the Company's internal, external, and wireless networks, and targeted social engineering through strategic phishing, vishing, and smishing campaigns.
Removed
At these meetings, our Vice President of Information Technology will review with our audit committee current and emerging cybersecurity threats, as well as key performance indicators for cybersecurity process maturity, operational performance, and enterprise performance in countering cybersecurity threats. Our Vice President of Information Technology will also annually review the Company’s cybersecurity risk management program with our Board.
Added
Action items and preventative recommendations were identified by management and are being incorporated into the Company’s information security incident response plan, which is designed to follow the National Institute of Standards and Technology Cybersecurity Framework 2.0 standards and practices for identifying and mitigating cybersecurity incidents.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeWe own and operate 16 federal leases and subsea pipelines, which transport crude oil, natural gas and produced water from the platforms to the onshore processing facilities. For further information, see “ Business—Operations .” Our principal executive office is located at 845 Texas Avenue, Suite 2900, Houston, Texas 77002. We consider our current office space adequate for our current operations.
Biggest changeFor further information, see “ Business—Operations .” Our principal executive office is located at 845 Texas Avenue, Suite 2920, Houston, Texas 77002. We consider our current office space adequate for our current operations. 43 Table of Contents Item 3.
Item 2. Properties SYU consists of three offshore platforms, Hondo, Heritage and Harmony, and an onshore oil and natural gas processing facility in Goleta, California. The platforms are located from five to nine miles offshore Santa Barbara County in federal waters.
Item 2. Properties Our assets consist of three offshore platforms, Hondo, Heritage and Harmony, an onshore oil and natural gas processing facility in Goleta, California and pipeline assets. The platforms are located from five to nine miles offshore Santa Barbara County, California in federal waters.
Added
We own and operate 16 federal leases and subsea pipelines, which transport crude oil, natural gas and produced water from the platforms to the onshore processing facilities along with the pipeline assets Line 324 and Line 325.
Added
Line 324 is a 24-inch, approximately 10.8 mile long crude oil pipeline that extends from the Los Flores Station on the California Coast to the Gaviota Pump Station in Santa Barbara County, California.
Added
Line 325 is a 30-inch, approximately 113 mile long crude oil pipeline that extends from the Gaviota Pump Station in Santa Barbara County, California to the 30-inch pig receiver located in Pentland Station in Kern County, California with an intermediate station at Sisquoc mile post 38.5 in San Louis Obispo, California.
Added
Legal Proceedings See Part II, Item 8 “Financial Statements and Supplementary Data — Notes to Consolidated Financial Statements,” Note 8 — Commitments and Contingencies for additional information regarding our legal proceedings.
Added
Other Legal Proceedings As part of Sable’s normal business activities, it may be named as a defendant in litigation and other legal proceedings, including those arising from regulatory and environmental matters. If Sable determines that a negative outcome is probable and the amount of loss is reasonably estimable, we will accrue the estimated amount.
Added
BSEE Matter On June 27, 2024, the Center for Biological Diversity and the Wishtoyo Foundation filed a complaint against Debra Haaland, Secretary of the U.S. Department of the Interior; BSEE; and Bruce Hesson, BSEE Pacific Regional Director in the U.S. District Court for the Central District of California (“the Court”) (Case No. 2:24-cv-05459).
Added
Sable was not named as a party to the case, but on December 3, 2024, the Court granted Sable’s motion to intervene as a defendant to become a party to the lawsuit, and Sable vigorously contests the plaintiffs’ allegations. On January 29, 2025, the Court granted plaintiffs’ request to supplement and amend their complaint.
Added
In the amended complaint, plaintiffs allege that BSEE: violated NEPA, OCSLA, and the APA in November 2023 by approving an extension to resume operations associated with the 16 oil and gas leases Sable holds in the SYU in federal waters offshore of California in the Santa Barbara Channel; and violated NEPA and the APA in September 2024 by approving applications for permits to modify for well reworking operations and by failing to conduct supplemental environmental analysis for oil and gas development and production in the SYU.
Added
The complaint asks for the Court: to issue an order finding that BSEE violated NEPA, OCSLA and the APA; to vacate and remand the extension and the applications for permits to modify; order BSEE to complete NEPA analysis by a date certain; to prohibit BSEE from authorizing further extensions, applications for permits to modify, or any other authorizations for restarting production until it complies with NEPA, OCSLA and the APA; and for an award of costs and attorneys’ fees.
Added
On December 20, 2024, the U.S. Department of Justice (in its capacity as counsel for the BSEE) filed a motion for voluntary remand without vacatur of BSEE’s November 2023 extension. Sable believes that the government’s prior extensions to resume operations were both appropriate and authorized. Moreover, under the government’s proposed remand, Sable’s operations on the SYU remain unaffected.
Added
California Coastal Commission On September 27, 2024, the Coastal Commission issued Notice of Violation No.
Added
V-9-24-0152 to Sable, which asserted that the safety valve installation work and certain maintenance and repair activities undertaken by Sable on the Pipelines in the Coastal Zone to address anomalies and install safety valves constituted unpermitted development activities under the Coastal Act and the County’s LCP.
Added
Sable undertook the subject repair and maintenance work , including the safety valve installation work, based on its understanding that no new coastal development permit or other Coastal Act authorization was required, consistent with the County’s practice of authorizing certain repair work on the pipelines since they were first permitted and built over 30 years ago, as well as the County’s acknowledgement that it does not have permit authority or jurisdiction over the Company’s installation of the sixteen new safety valves in the County along the Pipelines in accordance with the 2021 CBAT Plan.
Added
Following good faith negotiations with Coastal Commission staff, on November 12, 2024, the Coastal Commission issued Executive Director Cease and Desist Order No.
Added
ED-24-CD-02 to Sable requiring Sable to, among other requirements, prepare and submit an Interim Restoration Plan and submit an application either to the Coastal Commission or the County to obtain a coastal development permit for the valve installation and other maintenance and repair work.
Added
In compliance with the Order, Sable prepared, submitted, and implemented the Interim Restoration Plan as approved by Coastal Commission staff. Sable separately submitted certain applications to the County related to some of the maintenance and repair work that was subject to Notice of Violation No. V-9-24-0152. The Order expired on February 10, 2025.
Added
Sable subsequently recommenced the repair and maintenance activities which were subject to Notice of Violation V-9-24-0152.
Added
On February 12, 2025, the County delivered a letter to Sable confirming that certain Pipeline anomaly maintenance and repair work referenced in the Coastal Commission’s Notice of Violation V-9-24-0152 was “authorized by the existing permits (Final Development Plan, Major Conditional Use Permit, and associated Coastal Development Permits) and was analyzed in the prior Environmental Impact Report/Environmental Impact Statement (EIR/EIS).” The letter states in part that “[t]he County previously exercised its authority under its Local Coastal Program and delegated Coastal Act authority in approving the permits and the requested anomaly repair work is within the scope of those approved permits.” 44 Table of Contents In addition, also on February 12, 2025, the County delivered a letter to the Coastal Commission.
Added
In this letter, the County responded to a request by the Coastal Commission to consent to consolidated coastal development permit process for certain activities undertaken and planned by Sable on the Pipelines.
Added
The County’s letter also stated that certain maintenance and repair work on the Pipelines that was referenced in the Coastal Commission’s Notice of Violation V-9-24-0152 is “authorized by the existing permits (Final Development Plan, Major Conditional Use Permit, and associated Coastal Development Permits) and was analyzed in the prior Environmental Impact Report/Environmental Impact Statement.
Added
Thus, no further application to or action by the County is required.” On February 14, 2025, Sable submitted a written response to the Coastal Commission’s Notice of Violation V-9-24-0152 detailing that, consistent with the County’s letters, certain of the alleged unpermitted development subject to the Notice of Violation was previously approved and that no further coastal development permit is required.
Added
On February 16, 2025, the Coastal Commission sent Sable a “Notice Prior to Issuance of Executive Director Cease and Desist Order” related to certain of Sable’s Pipeline repair and maintenance activities and safety valve installation work.
Added
On February 17, 2025, Sable replied to the Coastal Commission with a letter stating that the “Coastal Act does not authorize the issuance of an [Executive Director Cease and Desist Order] under the present circumstances” and that “Sable intends to proceed with the anomaly repair work authorized by the County in its February 12, 2025 letter.” On February 18, 2025, Sable Offshore Corp. filed a complaint against the Coastal Commission in the Superior Court of the State of California for the County of Santa Barbara (Case No. 25CV00974).
Added
In the complaint, Sable challenges the Coastal Commission’s Notice of Violation V-9-24-0152 and Executive Director Cease and Desist Order ED-24-CD-02, in addition to other claims. Sable seeks a declaration that the Coastal Commission’s actions are unlawful, an injunction prohibiting further enforcement actions by the Coastal Commission, damages for the alleged taking of property rights, and attorneys' fees and costs.
Added
Also on February 18, 2025, the Coastal Commission issued (i) Executive Director Cease and Desist Order No.
Added
ED-25-CD-01 with respect to alleged unpermitted development activities located onshore along the Pipelines and (ii) a Notice of Intent to Commence Proceedings for a Commission Cease and Desist Order, Restoration Order, and Administrative Penalty Order with respect to alleged unpermitted development activities located onshore along the Pipelines and offshore at certain SYU facilities (the “EDCDO/NOI”).
Added
On March 6, 2025, Sable submitted additional materials to the County regarding certain anomaly repair and maintenance work completed by the Company prior to its receipt of Notice of Violation V-9-24-0152. It is Sable’s understanding that such work was authorized by the Pipelines’ original environmental review, coastal development permits, and related approvals.
Added
Sable has requested that the County confirm in writing that the previously completed work was previously approved and that no further coastal development permit is required.
Added
On March 10, 2025, Sable submitted a Statement of Defense and written response to the EDCDO/NOI to the Coastal Commission, which detailed that all alleged unpermitted development activities located onshore along the Pipelines and offshore at certain SYU facilities as described in the EDCDO/NOI did not constitute unpermitted development or violations of the Coastal Act because such activities were previously analyzed, approved, and authorized under existing coastal development permits for the Pipelines and the SYU facilities.
Added
As such, Sable denied that the Coastal Commission possessed the authority to issue the EDCDO/NOI or any cease and desist order, restoration order, or administrative penalty order with respect to such work.
Added
California Regional Water Quality Control Board On December 13, 2024, the Regional Board issued three letters to Sable related to the Pipelines: (i) a Notice of Violation for an alleged unauthorized discharge of waste to waters of the state at an ephemeral stream in the County; (ii) a Directive to obtain regulatory coverage for an alleged unauthorized discharge of waste to waters of the state at the same ephemeral stream identified in item (i); and (iii) a First Notice of Non-Compliance for an alleged failure to obtain coverage under the Regional Board’s General Permit for Stormwater Discharges Associated with Industrial Activities in the County and San Luis Obispo and Kern Counties in California.
Added
Sable believes that coverage under the Regional Board’s General Permit is not required. On January 10, 2025, Sable submitted a written response to each of the three letters to the Regional Board.
Added
On January 22, 2025, the Regional Board issued two additional letters to the Company related to the Pipelines: (i) a Second and Final Notice of Non-Compliance for an alleged failure to obtain coverage under the Regional Board’s General Permit for Stormwater Discharges Associated with Industrial Activities in the County and San Luis Obispo and Kern Counties; and (ii) an order requiring Sable to submit a technical report responding to information requests associated with the discharge of earthen material to waters of the state.
Added
On January 31, 2025, Sable submitted an application to the Regional Board for regulatory coverage under the Regional Board’s General Permit WQO 2004-004 for the alleged discharge waste to waters of the state, and on February 18, 2025, Sable submitted an application for CDFW for an after-the-fact Lake and Streambed Alteration Agreement (LSAA) to address the same site.
Added
On February 21, 2025, Sable submitted to the Regional 45 Table of Contents Board, under protest, an application for coverage under the Regional Board’s General Permit for Stormwater Discharges. On March 8, 2025, Sable submitted its responses to the Regional Board’s order requiring the Company to submit a technical report.
Added
California Department of Fish and Wildlife On December 17, 2024, CDFW issued a Notice of Potential Violation to Sable for alleged violations of the California Fish and Game Code at four separate sites within the County and San Luis Obispo County in California for alleged placement or fill of waste to waters.
Added
On January 13, 2025, Sable submitted a written response to CDFW. Permit applications for after-the-fact permits for these four sites were submitted to the Regional Board and CDFW during the week of March 10, 2025.
Added
Zaca Preserve Matter On October 3, 2024, plaintiff Zaca Preserve LLC filed a California state court complaint against Sable, its subsidiary PPC, Plains All American Pipeline LP, and Plains Pipeline LP. The case is captioned 24CV05483 and is pending in Santa Barbara Superior Court, Anacapa Division.
Added
The plaintiff filed a First Amended Complaint on December 12, 2024, and served the complaint on Sable and PPC on December 18, 2024. The plaintiff was a class member of the Grey Fox litigation that was settled effective September 17, 2024, and chose to opt out of the final settlement class.
Added
The plaintiff raises claims similar to the Grey Fox plaintiffs, namely that the pipeline easement on its property is no longer valid in light of the 2015 Refugio oil spill and the conduct of defendants.
Added
The plaintiff brings contract and tort claims and seeks declaratory and injunctive relief determining his easement terminated and prohibiting defendants from accessing or using his easement to restart pipeline operations. The plaintiff seeks compensatory, exemplary, and statutory damages, costs, attorneys’ fees, and interest, as well as declaratory and injunctive relief.
Added
By stipulation, Sable and PPC’s deadline to respond to the First Amended Complaint was March 4, 2025. Sable and PPC timely filed and served their Demurrer to the Plaintiff’s First Amended Complaint and Sable filed and served a Motion to Strike the First Amended Complaint. Sable and PPC intend to defend the case vigorously.
Added
See Part II, Item 8 “Financial Statements and Supplementary Data — Notes to Consolidated Financial Statements,” Note 8 — Commitments and Contingencies for additional information regarding this matter. Item 4. Mine Safety Disclosures Not applicable. 46 Table of Contents PART II

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Removed
Item 3. Legal Proceedings For information regarding the Line 901 incident and other legal proceedings, see “ Business—Pipeline 901 Incident. ” Other Legal Proceedings As part of Sable’s normal business activities, it may be named as a defendant in litigation and other legal proceedings, including those arising from regulatory and environmental matters.
Added
Item 3. Legal Proceedings for pending litigation concerning federal leases. Delivery Commitments Sable has no commitments to deliver a fixed and determinable quantity of its oil or natural gas production in the near future under any existing sales contracts. Derivative Activities Sable is not currently party to any commodity derivative contracts.
Removed
If Sable determines that a negative outcome is probable and the amount of loss is reasonably estimable, we will accrue the estimated amount.
Added
After the restart of production, Sable may enter into commodity derivative contracts with unaffiliated third parties to achieve more predictable cash flows and to reduce exposure to fluctuations in oil and natural gas prices.
Removed
Sable is not aware of any pending or threatened legal proceedings against Sable as of the date of this Annual Report on Form 10-K and no amounts have been accrued for litigation or legal proceedings as of December 31, 2023. Item 4. Mine Safety Disclosures Not applicable. PART II
Added
Sable may enter into commodity derivative contracts at times and on terms desired to maintain a portfolio of commodity derivative contracts covering a specified percentage or range of its estimated production, typically over a one-to-three-year period, at any given point of time. It may, however, hedge more or less than this approximate amount from time to time.
Added
Sable is not currently party to any interest rate swaps and substantially all of Sable’s indebtedness from the Business Combination consists of fixed-rate indebtedness. However, if Sable incurs variable rate indebtedness in the future it may periodically enter into interest rate swaps to mitigate exposure to market rate fluctuations by converting variable interest rates to fixed interest rates.
Added
Sable will only enter into derivative contracts with creditworthy counterparties (generally, financial institutions) deemed by management as competent and competitive market makers. Those counterparties may include existing or future lenders or their affiliates. Sable will continue to evaluate the benefit of employing derivatives in the future.
Added
Competition Sable operates in a highly competitive environment for securing trained personnel, contracting for drilling equipment, and from time to time leasing or otherwise acquiring new acreage. Many of its competitors possess and employ financial, technical and personnel resources substantially greater than Sable’s, which can be particularly important in the areas in which it operates.
Added
As a result, Sable’s competitors may be able to pay more for productive oil and natural gas properties and exploratory prospects, as well as evaluate, bid for and purchase a greater number of properties and prospects than its financial or personnel resources permit.
Added
Sable’s ability to acquire additional properties and to find and develop reserves and resources will depend on its ability to evaluate and select suitable properties and to consummate transactions in a highly competitive environment.
Added
In addition, there is substantial competition for capital available for investment in the oil and natural gas industry and many of its competitors have access to capital at a lower cost than that available to Sable. Seasonality Sable’s offshore operations can be impacted by inclement weather from time to time.
Added
The price Sable receives for natural gas production is typically impacted by seasonal fluctuations in demand for natural gas. The demand for natural gas typically peaks during the coldest months and tapers off during the milder months, with a slight increase during the summer to meet the demands of electric generators.
Added
The weather during any particular season can affect this cyclical demand for natural gas. Seasonal anomalies such as mild winters or hot summers can lessen or intensify this fluctuation. In addition, certain natural gas users utilize natural gas storage facilities and purchase some of their anticipated winter requirements during the summer. This can also lessen seasonal demand fluctuations.
Added
Recently there has been elevated 7 Table of Contents global demand for natural gas due to shortages exacerbated by geopolitical issues and conflicts but there is no assurance that demand will remain elevated.
Added
Insurance In accordance with customary industry practice, Sable will maintain insurance against many, but not all, potential losses or liabilities arising from its operations and at costs that it believes to be economic. Sable will regularly review its risks of loss and the cost and availability of insurance and revise its insurance accordingly.
Added
Its insurance will not cover every potential risk associated with its operations, including the potential loss of significant revenues. Sable can provide no assurance that its coverage will adequately protect it against liability from all potential consequences, damages and losses.
Added
Prior to or upon the restart of production Sable expects to have insurance policies including the following: Commercial General Liability; Oil Pollution Act Liability; Primary Umbrella / Excess Liability; Pollution Legal Liability; Property; Charterer’s Legal Liability; Workers’ Compensation; Non-Owned Aircraft Liability; Employer’s Liability; Automobile Liability; Maritime Employer’s Liability; Directors & Officers Liability; U.S.
Added
Longshore and Harbor Workers’; Employment Practices Liability; Energy Package/Control of Well; Crime; Loss of Production Income; Fiduciary Liability; and Cybersecurity. Sable monitors regulatory changes and comments and considers their impact on the insurance market, along with SYU’s overall risk profile.
Added
As necessary, Sable expects to adjust its risk and insurance program to provide protection at a level it considers appropriate while weighing the cost of insurance against the potential and magnitude of disruption to its operations and cash flows.
Added
Changes in laws and regulations could lead to changes in underwriting standards, limitations on scope and amount of coverage, and higher premiums, including possible increases in liability caps for claims of damages from oil spills.
Added
Potential Opportunities for Carbon Sequestration Sable may pursue new opportunities on the Outer Continental Shelf (“OCS”) for long-term sequestration of carbon dioxide that may otherwise go into the atmosphere.
Added
The 2021 Infrastructure Investment and Jobs Act gives the Secretary of the Interior new authority to allow the long-term sequestration of carbon dioxide on the OCS and directs the Secretary to promulgate regulations to implement the authority.
Added
As the regulatory program is developed over time, Sable intends to evaluate the potential to leverage its infrastructure for carbon sequestration in light of the new program and applicable local, state, and federal permitting requirements.
Added
Environmental, Occupational Safety and Health Matters and Regulations General Our oil and natural gas development and production operations are subject to stringent and complex federal, state and local laws and regulations governing the release or discharge of materials into the environment, health and safety aspects of its operations, or otherwise relating to protection of the environment and natural resources.
Added
These laws and regulations impose numerous obligations applicable to the Company's operations, as well as future plug and abandonment and decommissioning activities, including the issuance of certain permits before conducting regulated drilling activities; the restriction of types, quantities and concentration of materials that can be released or discharged into or through the environment; the limitation or prohibition of drilling activities on certain lands lying within protected or preserved areas; the application of specific health and safety criteria addressing worker protection; and the imposition of substantial liabilities for pollution and natural resources damages potentially resulting from its operations.
Added
Numerous governmental authorities, such as the EPA, BSEE, PHMSA, OSFM, California Department of Conservation’s Geologic Energy Management Division (“CalGEM”), Coastal Commission, CDFW, Regional Board, and the SLC, and other governmental agencies have the power to enforce compliance with these laws and regulations and the permits issued 8 Table of Contents under them, often requiring difficult and costly compliance or corrective actions.
Added
Failure to comply with these laws and regulations may result in the assessment of sanctions, including administrative, civil or criminal penalties, the imposition of investigatory or remedial obligations, injunctive relief, the suspension or revocation of necessary permits, licenses and authorizations, the requirement that additional pollution controls be installed and in some instances, the issuance of orders limiting or prohibiting some or all of its operations.
Added
We may also experience delays in obtaining or be unable to obtain required permits, including authorizations necessary to restart the Pipelines or maintain operations, which may delay or interrupt our operations and limit its growth and revenue. In addition, the long-term trend in environmental regulation has been to place more restrictions and limitations on activities that may affect the environment.
Added
SYU’s costs of compliance may increase if existing laws and regulations are revised or reinterpreted, or if new laws and regulations become applicable to its operations. Changing perspectives within the Executive Branch of the U.S. federal government and environmental litigation involving the validity of certain regulatory requirements associated with exploration, development and decommissioning may materially impact our compliance costs.
Added
Consequently, SYU’s costs of compliance may increase if existing laws and regulations are revised or reinterpreted, or if new laws and regulations become applicable to its operations.
Added
Under certain environmental laws that impose strict as well as joint and several liability, SYU may be required to remediate contaminated properties currently or formerly owned or operated by it or facilities of third parties that received waste generated by its operations, regardless of whether such contamination resulted from its conduct or the conduct of others that was in compliance with all applicable laws at the time of such conduct.
Added
In addition, claims for damages to persons or property, including natural resources, may result from the environmental, health and safety impacts of its operations. Moreover, public interest in the protection of the environment has increased in recent years.
Added
New laws and regulations continue to be enacted, particularly at the state level, and the long-term trend of more expansive and stringent environmental legislation and regulations applied to the crude oil and natural gas industry could continue, resulting in increased costs of doing business and consequently affecting profitability.
Added
To the extent new or more stringent laws are enacted or other governmental action is taken that restricts drilling or imposes more stringent and costly operating, waste handling, disposal and cleanup requirements, our business, prospects, financial condition or results of operations could be materially adversely affected.
Added
The following is a summary of the more significant existing environmental, occupational safety and health laws and regulations to which our business operations are subject and for which compliance may have a material adverse impact on its capital expenditures, results of operations or financial position.
Added
Offshore Operations Our oil and gas operations are conducted on offshore leases in federal waters and those operations are regulated by agencies such as the Bureau of Ocean Energy Management (“BOEM”) and BSEE, which have broad authority to regulate our oil and gas operations. BOEM is responsible for managing environmentally and economically responsible development of the nation’s offshore resources.
Added
Its functions include offshore leasing, resource evaluation, review and administration of oil and gas exploration and development plans, renewable energy development, and National Environmental Policy Act (“NEPA”) analysis and environmental review. Lessees must obtain BOEM approval for exploration and development and production plans prior to the commencement of offshore operations.
Added
BOEM generally requires that lessees have substantial net worth, post supplemental bonds or provide other acceptable assurances that the lease obligations will be met.
Added
In April 2024, BOEM published a final rule that substantially revises the financial assurance requirements applicable to offshore oil and gas operations by requiring certain oil, gas, and sulfur lessees; right-of-use and easement grant holders; and pipeline right-of-way grant holders to obtain supplemental financial assurance for decommissioning activities on OCS leases, rights-of-way and rights-of-use and easements.
Added
This rule is included in Secretary's Order 3418 implementing President Trump’s Unleashing American Energy executive order for suspension, revision or rescission. BSEE is responsible for safety and environmental oversight of offshore oil and gas operations.
Added
Its functions include the development and enforcement of safety and environmental regulations, permitting offshore exploration, development and production, inspections, offshore regulatory programs, oil spill response and training and environmental compliance programs.
Added
BSEE regulations require offshore production facilities and pipelines located on the OCS to meet stringent engineering and construction specifications, and BSEE has proposed and/or promulgated additional safety-related regulations concerning the design and operating procedures of these facilities and pipelines, including regulations to safeguard against or respond to well blowouts and other catastrophes.
Added
BSEE regulations also restrict the flaring or venting of natural gas, prohibit the flaring of liquid hydrocarbons and govern the plugging and abandonment of wells located 9 Table of Contents offshore and the installation and removal of all fixed drilling and production facilities.
Added
In April 2023, BSEE issued a final rule clarifying and providing transparency to the process by which BSEE will enforce decommissioning obligations on existing lessees and rights-of-use and easement grant holders.
Added
BSEE’s final rule adopted new timeframes for predecessors to respond to a decommissioning order to perform accrued decommissioning obligations, and clarified that right-of-use and easement grant holders also accrue decommissioning obligations. BOEM and BSEE have adopted regulations providing for enforcement actions, including civil penalties and lease forfeiture or cancellation for failure to comply with regulatory requirements for offshore operations.
Added
If we fail to pay royalties or comply with safety and environmental regulations, BOEM and BSEE may take action that seeks the curtailment, suspension, or termination of our operations and we may be subject to civil or criminal liability.
Added
Additionally, delays in the approval or refusal of plans and issuance of permits by BOEM or BSEE because of staffing, economic, environmental, legal or other reasons (or other actions taken by BOEM or BSEE) could adversely affect SYU’s offshore operations. The requirements imposed by BOEM and BSEE regulations are frequently changed and subject to new interpretations.
Added
Also, in addition to permits and approvals required by BOEM and BSEE, approvals and permits may be required from other agencies for the oil and gas operations associated with SYU’s properties, such as the U.S. Coast Guard, the EPA, U.S. Department of Transportation, U.S.
Added
Army Corps of Engineers and state and local authorities, such as the Coastal Commission, California State Parks and the SLC. Hazardous Substances and Waste Handling Our operations are subject to environmental laws and regulations relating to the management and release of hazardous substances, solid and hazardous wastes and petroleum hydrocarbons.
Added
These laws generally regulate the generation, storage, treatment, transportation and disposal of solid and hazardous waste and may impose strict and, in some cases, joint and several liability for the investigation and remediation of affected areas where hazardous substances may have been released or disposed.
Added
The Comprehensive Environmental Response, Compensation and Liability Act, as amended (“CERCLA”), also referred to as the Superfund law and comparable state laws, impose liability, without regard to fault or the legality of the original conduct, on certain potentially responsible parties.
Added
These persons include current owners or operators of the site where a release of hazardous substances occurred, prior owners or operators that owned or operated the site at the time of the release or disposal of hazardous substances and companies that disposed or arranged for the disposal of the hazardous substances found at the site.
Added
Under CERCLA, these persons may be subject to strict and joint and several liability for the costs of cleaning up the hazardous substances that have been released into the environment, for damages to natural resources and for the costs of certain health studies.
Added
CERCLA also authorizes the EPA and, in some instances, third parties to act in response to threats to the public health or the environment and to seek to recover the costs they incur from the responsible classes of persons.
Added
Despite the “petroleum exclusion” of Section 101(14) of CERCLA, which currently encompasses natural gas, we may nonetheless handle hazardous substances within the meaning of CERCLA, or similar state statutes, in the course of its ordinary operations and as a result, may be jointly and severally liable under CERCLA for all or part of the costs required to clean up sites at which these hazardous substances have been released into the environment.
Added
Also, comparable state statutes may not contain a similar exemption for petroleum, and it is also not uncommon for neighboring landowners and other third parties to file common law-based claims for personal injury and property damage allegedly caused by hazardous substances or other pollutants released into the environment.
Added
In addition, we may have liability for releases of hazardous substances at its properties by prior owners or operators or other third parties. The Oil Pollution Act is the primary federal law imposing oil spill liability.
Added
The Oil Pollution Act contains numerous requirements relating to the prevention of, and response to petroleum releases into waters of the United States, including the requirement that operators of offshore facilities and certain onshore facilities near or crossing waterways must maintain certain significant levels of financial assurance to cover potential environmental cleanup and restoration costs.
Added
Under the Oil Pollution Act, strict, joint and several liability may be imposed on “responsible parties” for all containment and cleanup costs and certain other damages arising from a release, including, but not limited to, the costs of responding to a release of oil to surface waters and natural resource damages resulting from oil spills into or upon navigable waters, adjoining shorelines or in the exclusive economic zone of the United States.
Added
A “responsible party” includes the owner or operator of an onshore facility.
Added
The Oil Pollution Act establishes a liability limit for onshore facilities, but these liability limits may not apply if: a spill is caused by a party’s gross negligence or willful misconduct; the spill resulted from violation of a federal safety, construction or operating regulation; or a party fails to report a spill or to cooperate fully in a cleanup.
Added
We are also subject to analogous state statutes that impose liabilities with respect to oil spills.
Added
For example, the CDFW’s Office of Oil Spill Prevention and Response has adopted oil-spill prevention regulations that overlap with federal regulations. 10 Table of Contents We also generate solid wastes, including hazardous wastes, which are subject to the requirements of the Resource Conservation and Recovery Act, as amended (“RCRA”), and comparable state statutes.
Added
Although RCRA regulates both solid and hazardous wastes, it imposes stringent requirements on the generation, storage, treatment, transportation and disposal of hazardous wastes. Certain petroleum production wastes are excluded from RCRA’s hazardous waste regulations. These wastes, instead, are regulated under RCRA’s less stringent solid waste provisions, state laws or other federal laws.
Added
It is possible that these wastes, which could include wastes expected to be generated during our operations, could be designated as “hazardous wastes” in the future and, therefore, be subject to more rigorous and costly disposal requirements.
Added
Indeed, legislation has been proposed from time to time in Congress to re-categorize certain oil and gas exploration and production wastes as “hazardous wastes.” Also, in December 2016, the EPA entered into a consent decree requiring it to review its regulation of oil and gas waste.
Added
In April 2019, the EPA determined that revisions to the RCRA regulations were not required, concluding that any adverse effects related to oil and gas waste are more appropriately and readily addressed within the framework of existing state regulatory programs.
Added
However, any such changes to state programs could result in an increase in our costs to manage and dispose of oil and gas waste, which could have a material adverse effect on its maintenance capital expenditures and operating expenses. It is possible that our oil and natural gas operations may require us to manage naturally occurring radioactive materials (“NORM”).
Added
NORM is present in varying concentrations in sub-surface formations, including hydrocarbon reservoirs, and may become concentrated in scale, film and sludge in equipment that comes into contact with crude oil and natural gas production and processing streams. Some states have enacted regulations governing the handling, treatment, storage and disposal of NORM.
Added
Administrative, civil and criminal penalties can be imposed for failure to comply with hazardous substance and waste handling requirements.
Added
For ownership and operation of the idled SYU Assets, we believe that we are in substantial compliance with the requirements of CERCLA, Oil Pollution Act, RCRA and other applicable federal and related state and local laws and regulations, and that we hold all necessary and up-to-date permits, registrations and other authorizations required under such laws and regulations.
Added
Although we believe that the costs of managing the Company's hazardous substances and wastes as they are presently classified are reflected in the Company's budget, any legislative or regulatory reclassification of oil and natural gas exploration and production wastes could increase its costs to manage and dispose of such wastes.
Added
Water Discharges The Federal Water Pollution Control Act (the “ Clean Water Act ”), the Safe Drinking Water Act (“SDWA”), the Oil Pollution Act and analogous state laws, impose restrictions and strict controls with respect to the discharge of pollutants, including oil and hazardous substances, into navigable waters of the United States, as well as state waters.
Added
The discharge of pollutants into regulated waters is prohibited, except in accordance with the terms of a permit issued by the EPA or an analogous state agency. These laws and regulations also prohibit certain activity in wetlands unless authorized by a permit issued by the U.S. Army Corps of Engineers.
Added
In May 2023, the Supreme Court issued an opinion in Sackett v. EPA that limited the jurisdiction of the U.S. Army Corps of Engineers to wetlands with a continuous surface connection to a permanent body of water connected to traditional navigable waters, such as streams, oceans, rivers, and lakes.
Added
To the extent a new rule or further litigation expands the scope of the Clean Water Act’s jurisdiction or impacts available agency resources, we could face increased costs and/or delays with respect to obtaining permits for dredge and fill activities in wetland areas.
Added
The EPA has also adopted regulations requiring certain oil and natural gas exploration and production facilities to obtain individual permits or coverage under general permits for storm water discharges.
Added
Costs may be associated with the treatment of storm water or developing and implementing storm water pollution prevention plans, as well as for monitoring and sampling the storm water runoff from certain of our facilities. Some states also maintain groundwater protection programs that require permits or specify other requirements for discharges or operations that may impact groundwater conditions.
Added
These same regulatory programs may also limit the total volume of water that can be discharged, hence limiting the rate of development and requiring us to incur compliance costs. Additionally, we are required to develop and implement spill prevention, control and countermeasure plans, in connection with on-site storage of significant quantities of oil.

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Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeIn connection with the Business Combination, the Company adopted the Incentive Plan in order to facilitate the grant of cash and equity incentives to directors, employees, including named executive officers, and consultants to help attract and retain the services of these individuals.
Biggest changeThe following table sets forth, for the periods indicated, Sable's equity incentive plans authorized activity: Plan category Number of securities to be issued upon exercise of outstanding options, warrants and rights Weighted-average exercise price of outstanding options, warrants and rights Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (a) (b) (c) Equity compensation plans approved by security holders — — — Equity compensation plans not approved by security holders — — 10,747,299 Total — — 10,747,299 In connection with the Business Combination, the Company adopted the Incentive Plan in order to facilitate the grant of cash and equity incentives to directors, employees, including named executive officers, and consultants to help attract and retain the services of these individuals.
The aggregate number of shares of Common Stock that are available for issuance under the Incentive Plan is 15,621,569, provided that the number of shares of Common Stock authorized for issuance under the Incentive Plan is subject to an annual increase for ten years on the first day of each calendar year beginning January 1, 2024, in an amount equal to the lesser of (A) 5% of the aggregate number of shares of Common Stock outstanding on the final day of the immediately preceding calendar year and (B) such smaller number of shares as is determined by the Board.
As of December 31, 2024, the aggregate number of shares of Common Stock that are available for issuance under the Incentive Plan is 10,747,299, provided that the number of shares of Common Stock authorized for issuance under the Incentive Plan is subject to an annual increase for ten years on the first day of each calendar year beginning January 1, 2024, in an amount equal to the lesser of (A) 5% of the aggregate number of shares of Common Stock outstanding on the final day of the immediately preceding calendar year and (B) such smaller number of shares as is determined by the Board.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities. Our Common Stock and Public Warrants trade on the NYSE under the symbols “SOC” and “SOC.WS,” respectively.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities. Our Common Stock trades on the NYSE under the symbol “SOC”.
Holders On March 27, 2024, there were 56 holders of record of our Common Stock, 1 holder of record of our Public Warrants and nine holders of record of our private placement warrants. Securities Authorized for Issuance Under Equity Compensation Plans. As of December 31, 2023, we had no equity compensation plans or outstanding equity awards.
Holders On March 14, 2025, there were 54 holders of record of our Common Stock, and eight holders of record of our private placement warrants. Securities Authorized for Issuance Under Equity Compensation Plans.
Added
Recent Sales of Unregistered Securities On October 3, 2024, Sable Aviation, LLC (“Sable Aviation”), an entity controlled by our Chairman and Chief Executive Officer, and Sable entered into an Agreement of Purchase and Sale, pursuant to which Sable Aviation sold transportation assets and related equipment to Sable in exchange for 600,000 shares of Common Stock, valued at $15.2 million.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeBusiness Combination On November 2, 2022, we entered into an agreement and plan of merger, dated as of November 2, 2022 (as amended, the “Merger Agreement”), with Sable Offshore Corp., a Texas corporation (“SOC”), and Sable Offshore Holdings, LLC, a Delaware limited liability company and the parent company of SOC (“Holdco” and, together with SOC, “ Legacy Sable”).
Biggest changeOn November 2, 2022, Flame entered into an agreement and plan of merger, dated as of November 2, 2022 (as amended, the “Merger Agreement”), with SOC and Sable Offshore Holdings, LLC, a Delaware limited liability company and the parent company of SOC (“Holdco” and, together with SOC, “Legacy Sable”), which provided for the following transactions at the closing: (i) Holdco would merge with and into Flame, with Flame surviving such merger (the “Holdco Merger”) and (ii) SOC would merge with and into Flame, with Flame surviving such merger (the “SOC Merger” and, together with the Holdco Merger, the “Mergers” and, along with the other transactions contemplated by the Merger Agreement, the “Business Combination”).
Overview We were incorporated in Delaware on October 16, 2020 and, until February 14, 2024, were a blank check company formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses.
We were incorporated in Delaware on October 16, 2020 and, until February 14, 2024, were a blank check company formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses.
Special Meeting and Closing of the Transactions On February 12, 2024, we held a special meeting of stockholders (the “Special Meeting”), at which the Flame stockholders considered and adopted, among other matters, a proposal to approve the Business Combination, including (a) adopting the Merger Agreement and (b) approving the other transactions contemplated by the Merger Agreement.
On February 12, 2024, Flame held a special meeting of stockholders (the “Special Meeting”), at which the Flame stockholders considered and adopted, among other matters, a proposal to approve the Business Combination, including (a) adopting the Merger Agreement and (b) approving the other transactions contemplated by the Merger Agreement.
If the Company is unable to raise additional capital, it may be required to take additional measures to conserve liquidity, which could include, among other things, suspending repair efforts and reducing overhead expenses. The Company cannot provide any assurance that new financing will be available to it on commercially acceptable terms, if at all.
If the Company is unable to raise additional capital, it may be required to take additional measures to conserve liquidity, which could include, among other things, reducing overhead 52 Table of Contents expenses. The Company cannot provide any assurance that new financing will be available to it on commercially acceptable terms, if at all.
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our financial statements and related notes thereto included elsewhere in this annual report.
The following discussion and analysis of our financial condition and results of operations is provided as a supplement to, and should be read in conjunction with our financial statements and related notes thereto included elsewhere in this Annual Report.
Additionally, if the Company’s estimates of the costs of restarting production are less than the actual amounts necessary to do so, the Company may have insufficient funds available to operate its business prior to first production and will need to raise additional capital.
However, the Company’s plans for production restart are contingent upon approvals from federal, state and local regulators. Additionally, if the Company’s estimates of the costs of restarting production are less than the actual amounts necessary to do so, the Company may have insufficient funds available to operate its business prior to first production and will need to raise additional capital.
The financial statements included in this annual report do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that could be necessary if the Company is unable to continue as a going concern. 46 Table of Contents Liquidity and Capital Resources As of December 31, 2023, we had cash of $267,816.
The financial statements included in this Annual Report do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that could be necessary if the Company is unable to continue as a going concern.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations Unless otherwise indicated, references to “we”, “us”, “our”, “Flame” or the “Company” in this Item 7 are to Flame Acquisition Corp. before the consummation of the Business Combination. References to “New Sable” are to Sable Offshore Corp., after the consummation of the Business Combination.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Unless otherwise indicated, references to “we”, “us”, “our”, “Sable” or the “Company” in this Item 7 are to Sable Offshore Corp. (f/k/a Flame Acquisition Corp.) and its consolidated subsidiaries, following the Business Combination.
The Company is currently reviewing what impact, if any, adoption will have on the Company’s financial position, results of operations or cash flows. Our management does not believe that any other recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on our financial statements.
Recent Accounting Pronouncements Our management does not believe that any other recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on our financial statements.
The difference between the fair value of the private placement warrants and the initial purchase consideration thereof is recorded as compensation expense. The liabilities are subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in our statement of operations.
Accordingly, we recognize the warrant instruments as liabilities at fair value and adjust the instruments to fair value at each reporting period. The liabilities are subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in our statement of operations.
We evaluate all of our financial instruments, including issued stock purchase warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives, pursuant to ASC 480 and ASC 815-15. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period.
We do not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. We evaluate all of our financial instruments, including issued stock purchase warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives, pursuant to ASC 480 and ASC 815-15.
Management has addressed near-term capital funding needs with the PIPE capital raise and the consummation of the Business Combination and believes the Company has sufficient capital to maintain operations and complete the repairs necessary to restart production at SYU. However, the Company’s plans for production restart are contingent upon approvals from federal, state and local regulators.
Since the consummation of the Business Combination, Sable has addressed near-term capital funding needs with the First PIPE Investment, the Second PIPE Investment and proceeds from the exercise of Warrants (refer to Note 7 — Warrants for additional details regarding the warrant exercises) and believes the Company has sufficient capital to maintain operations and complete the repairs necessary to restart production.
On February 14, 2024, immediately following the Closing, New Sable issued 44,024,910 shares of Common Stock, at a price of $10.00 per share for an aggregate PIPE Investment of $440,249,100 in accordance with the terms of the PIPE Subscription Agreements.
In connection with the Business Combination, Flame changed its name to “Sable Offshore Corp.” First PIPE Investment On February 14, 2024, in connection with the Business Combination, the Company issued 44,024,910 shares of Common Stock, at a price of $10.00 per share for aggregate gross proceeds of $440.2 million (the "First PIPE Investment").
We expect to incur increased expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses.
Post the Business Combination, we expect to incur additional expenses as a result of being an operating public company, for legal, accounting and compliance expenses. 50 Table of Contents The following table presents selected consolidated financial results of operations for the Successor and Predecessor periods presented.
We issued 14,375,000 common stock warrants to investors in our initial public offering and issued 7,750,000 private placement warrants. All of our outstanding warrants are recognized as derivative liabilities in accordance with ASC 815-40. Accordingly, we recognize the warrant instruments as liabilities at fair value and adjust the instruments to fair value at each reporting period.
The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period. All of our outstanding warrants are recognized as derivative liabilities in accordance with ASC 815-40.
We have neither engaged in any operations nor generated any revenues to date. We will not generate any operating revenues until after completion of our initial business combination. We will generate non-operating income in the form of interest income on cash and cash equivalents and changes in fair value of our derivative warrant liabilities and promissory notes.
We lack the ability to generate any operating revenues until we receive the necessary regulatory approvals and complete the repairs necessary to restart production. Our only source of non-operating income is generated in the form of interest income on cash and cash equivalents.
The preparation of our financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, income and expenses and the disclosure of contingent assets and liabilities in our financial statements. On an ongoing basis, we evaluate our estimates and judgments, including those related to fair value of financial instruments and accrued expenses.
Critical Accounting Estimates The preparation of consolidated financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the combined financial statements, and income and expenses during the periods reported.
Removed
The financial information included in this Item 7 is that of the Company prior to the Business Combination because the Business Combination was consummated subsequent to the period covered by the audited financial statements included in this annual report. 42 Table of Contents Cautionary Note Regarding Forward-Looking Statements This annual report includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
Added
References to “Flame” are to Flame Acquisition Corp. before the consummation of the Business Combination. References to the “Pipelines” are to Pipeline Segments 324/325 (formerly known as Pipeline Segments 901/903) and the other “324/325 Assets” (formally known as "901/903 Assets" and as defined in the Sable-EM Purchase Agreement).
Removed
We have based these forward-looking statements on our current expectations and projections about future events.
Added
As a result of the closing of the Business Combination, which was accounted for as a forward merger in accordance with GAAP, the financial statements of Successor (as defined below) are now the financial statements of the Company.
Removed
These forward-looking statements are subject to known and unknown risks, uncertainties and assumptions about us that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements.
Added
In addition to historical data, this discussion contains forward-looking statements about our business, operations and financial performance based on current expectations that involve risks, uncertainties and assumptions.
Removed
In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “could,” “would,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “continue,” or the negative of such terms or other similar expressions.
Added
Our actual results may differ materially from those discussed in the forward-looking statements as a result of various factors, including but not limited to those discussed in “Cautionary Notice Regarding Forward-Looking Statements” and Part I, Item 1A, “Risk Factors.” Overview Sable Offshore Corp. is an independent oil and gas company headquartered in Houston, Texas.
Removed
Such statements include, but are not limited to, possible business combinations and the financing thereof, and related matters, as well as all other statements other than statements of historical fact included in this Form 10-K. Factors that might cause or contribute to such a discrepancy include, but are not limited to, those set forth under “Item 1A.
Added
Business Combination On November 1, 2022 (as amended on June 13, 2023 and December 15, 2023), Sable Offshore Corp., a Texas corporation (“SOC”), entered into a purchase and sale agreement (as amended, the “Sable-EM Purchase Agreement”) with Exxon Mobil Corporation (“Exxon”) and Mobil Pacific Pipeline Company (“MPPC,” and together with Exxon, “EM”) pursuant to which SOC agreed to acquire from EM certain assets constituting the Santa Ynez field in Federal waters offshore California (“SYU”) and associated onshore processing and pipeline assets (such “Assets,” as defined in the Sable-EM Purchase Agreement, collectively the “SYU Assets”).
Removed
Risk Factors” and elsewhere in this annual report, and those described in our other Securities and Exchange Commission filings.
Added
The shares of Common Stock issued in the First PIPE Investment were offered in a private placement under the Securities Act of 1933, as amended (the “Securities Act”).
Removed
Pursuant to the Merger Agreement, on February 14, 2024, (i) Holdco merged with and into Flame, with Flame surviving such merger (the “Holdco Merger”) and (ii) SOC merged with and into Flame, with Flame surviving such merger (the “SOC Merger” and, together with the Holdco Merger, the “Mergers” and, along with the other transactions contemplated by the Merger Agreement, the “Business Combination”).
Added
Upon the closing of the Business Combination, an associated marketing fee 48 Table of Contents and legal fees of approximately $22.9 million was paid in full, and is recognized as an offset to the proceeds from the First PIPE Investment.
Removed
In connection with the Business Combination, Flame changed its name to “Sable Offshore Corp.”.
Added
Second PIPE Investment On September 26, 2024, the Company issued 7,500,000 shares of Common Stock of the Company, at a price of $20.00 per share for aggregate gross proceeds of approximately $150.0 million (the "Second PIPE Investment"). The shares of Common Stock issued in the Second PIPE Investment were offered in a private placement under the Securities Act.
Removed
PIPE Subscription Agreements In connection with the Business Combination, Holdco and Flame entered into subscription agreements (collectively, as amended, supplemented or otherwise modified, the “Initial PIPE Subscription Agreements”) with certain investors (the “PIPE Investors”) for an aggregate commitment amount of $520,000,000 (the “Initial PIPE Investments”), pursuant to which such investors agreed to purchase an aggregate of 52,000,000 shares of common stock of New Sable, par value of $0.0001 per share (“Common Stock”), at a price of $10.00 per share upon the consummation of the Business Combination.
Added
An associated marketing fee and legal fees of approximately $7.8 million was recognized as an offset to the proceeds from the Second PIPE Investment.
Removed
On February 12, 2024, following the Special Meeting, a PIPE Investor that subscribed for $125,000,000 of the Initial PIPE Investment informed the Company that it would not be able to fund that subscribed amount by the Closing due to difficulties it experienced related to receiving called capital from certain of its foreign investors.
Added
Public Warrant Exercises On October 3, 2024, Sable issued a press release announcing the redemption of all of its outstanding Public Warrants to purchase shares of Common Stock that were issued under the Warrant Agreement, as part of the units sold in the Company IPO. On October 31, 2024, the Public Warrants ceased trading on the New York Stock Exchange.
Removed
The inability of that PIPE Investor to fund its commitment did not relieve the obligations of the other PIPE Investors to fund their commitments in connection with the Closing.
Added
As of November 4, 2024 (the “Redemption Date”), approximately 99.8% of the Company’s outstanding Public Warrants were exercised by the holders thereof to purchase fully paid and non-assessable shares of Common Stock at an exercise price of $11.50 per share.
Removed
On February 12, 2024 and February 13, 2024, the Company entered into subscription agreements (collectively, the “Additional PIPE Subscription Agreements” and, together with the Initial PIPE Subscription Agreements, the “PIPE Subscription Agreements”) (including an additional $25,000,000 commitment from James C.
Added
As a result, holders of the Public Warrants received an aggregate of 15,957,820 shares of the Company’s Common Stock in exchange for $183.5 million in cash proceeds to the Company. All unexercised and outstanding Public Warrants as of 5:00 p.m.
Removed
Flores, our Chairman and Chief Executive Officer) on substantially the same terms as those contained in the Initial PIPE Subscription Agreements to replace, in the aggregate, $55,000,000 of the amount previously committed by the PIPE Investor described above (the “Additional PIPE Investments” and, together with the Initial PIPE Investments, the “PIPE Investments”).
Added
New York City time on the Redemption Date were redeemed at a price of $0.01 per Public Warrant and, as a result, no Public Warrants currently remain outstanding and the Public Warrants have ceased trading on the New York Stock Exchange.
Removed
The shares of Common Stock issued in the PIPE Investments were offered in a private placement under the Securities Act of 1933, as amended (the “Securities Act”), pursuant to the PIPE Subscription Agreements. 43 Table of Contents Registration Rights Agreement On the Closing Date, in connection with the consummation of the Business Combination and as contemplated by the Merger Agreement, the holders of the limited liability company interests in Holdco designated as Holdco Class A shares entered into a registration rights agreement with New Sable (the “Registration Rights Agreement”) pursuant to which the holders were granted certain registration rights with respect to the Common Stock received as consideration in the Merger.
Added
The private placement warrants and working capital warrants to purchase Common Stock that were issued under the Warrant Agreement and that are still held by the initial holders thereof or their permitted transferees were not subject to this redemption and remain outstanding. Refer to Note 7 — Warrants for additional details regarding the warrant exercises.
Removed
Pursuant to the Registration Rights Agreement, New Sable agreed to file a registration statement within 30 calendar days after the consummation of the Merger registering the resale of the registrable securities under the Registration Rights Agreement, and use its commercially reasonable efforts to have the registration statement declared effective by the SEC by the earlier of (i) the 90th calendar day (or 120th calendar day if the SEC notifies New Sable that it will review the registration statement) following the closing of the Merger and (ii) the 10th business day after the date New Sable are notified (orally or in writing, whichever is earlier) by the SEC that the registration statement will not be reviewed or will not be subject to further review.
Added
SYU Assets Beginning in 1968 and over the course of 14 years, EM consolidated more than a dozen offshore federal oil leases and organized them into a streamlined production unit known as SYU. SYU consists of three offshore platforms and a wholly owned onshore processing facility located along the Gaviota Coast at Las Flores Canyon in Santa Barbara County, California.
Removed
New Sable thereafter will be required to maintain a registration statement that is continuously effective and to cause the registration statement to regain effectiveness in the event that it ceases to be effective.
Added
SYU’s onshore facilities and the three offshore platforms remained in continuous operation until 2015. In May 2015, a pipeline operated by Plains All American Pipeline, L.P.
Removed
At any time the registration statement is effective, any holder signatory to the Registration Rights Agreement may request, one time in any 12-month period, to sell all or a portion of its securities that are registrable in an underwritten offering pursuant to the registration statement for a total offering price reasonably expected to exceed, in the aggregate, $25 million.
Added
(“Plains”) that transported produced oil from SYU experienced a leak, as further described under “Business—Pipeline 901 Incident.” The SYU platforms and facilities suspended production after the incident, the SYU Assets were shut in and the facilities were placed in a safe state.
Removed
In addition, the holders have certain “piggyback” registration rights with respect to registrations initiated by New Sable and other New Sable stockholders. New Sable will bear the expenses incurred in connection with the filing of any registration statements pursuant to the Registration Rights Agreement, subject to limited exceptions.
Added
The facilities are not currently producing oil and gas; however, all equipment remains in place in an operation-ready state, requiring ongoing inspections, maintenance and surveillance. As part of these suspension efforts, all equipment was drained, flushed and purged in 2016. All hydrocarbon pipelines within SYU have been placed in a safe state and remain under regular monitoring.
Removed
Pursuant to the Registration Rights Agreement, the holders of Holdco Class A shares immediately prior to the effective time of the Holdco Merger, subject to limited exceptions, agreed to a lock-up on their shares of Common Stock, pursuant to which such parties agreed to not transfer shares of Common Stock held by such parties for a period of three years following the closing of the Business Combination.
Added
In 2020, Plains entered into a Consent Decree, described further under “Business—Pipeline 901 Incident,” that provides a path for a potential restart of the Pipelines.
Removed
The foregoing description of the Registration Rights Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the form Registration Rights Agreement filed as an exhibit to New Sable’s Current Report on Form 8-K, filed with the SEC on February 14, 2024.
Added
The discussion of the results of operations for the Predecessor periods below do not include the results from the Pipelines and the Pipelines are not included in the combined financial statements of the Predecessor included in the financial statements and related notes thereto included elsewhere in this Annual Report.
Removed
Recent Events On February 21, 2023, to mitigate the risk of us being deemed to have been operating as an unregistered investment company (including under the subjective test of Section 3(a)(1)(A) of the Investment Company Act), the investments in U.S. government securities or money market funds held in the Trust Account were liquidated to thereafter be held in cash (which may include an interest bearing demand deposit account at a national bank) until earlier of: (i) the completion of a Business Combination and (ii) the distribution of the funds in the Trust Account to the Company’s stockholders. 44 Table of Contents On February 27, 2023, at a special meeting of stockholders, the Company’s stockholders voted to approve an amendment (the “Extension Amendment Proposal”) to the amended and restated certificate of incorporation to extend the date by which the Company must complete a business combination (the “Extension”) from March 1, 2023, to September 1, 2023 (the “Extended Date”).
Added
Financial statements of the Pipelines have not been included because SEC guidance provides that the financial statements of recently acquired businesses such as the Pipelines need not be filed unless their omission would render Predecessors combined financial statements misleading or substantially incomplete.
Removed
In connection with the Extension, stockholders holding 20,317,255 shares of our Class A common stock, par value $0.0001 per share (“Flame Class A common stock”) exercised their right to redeem such shares for a pro rata portion of the funds in the Trust Account, representing approximately 70.67% of our issued and outstanding Flame Class A common stock.
Added
Based upon our quantitative and qualitative analysis, we do not believe omitting the financial statements of the Pipelines renders the Predecessor combined financial statements misleading or substantially incomplete. The Successor financial statements include the results from the Pipelines and the Pipelines are included in the consolidated financial statements.
Removed
As a result, $206,121,060 (approximately $10.15 per share) was removed from the Trust Account to pay such redeeming holders on March 2, 2023. On February 27, 2023, in connection with the Extension, we filed an amendment (the “Extension Amendment”) to our Amended and Restated Certificate of Incorporation with the Secretary of State of the State of Delaware.
Added
For the purposes of the consolidated financial statements, periods on or before February 13, 2024 reflect the financial position, results of operations and cash flows of SYU prior to the Business Combination, referred to herein as the “Predecessor,” and periods beginning on or after February 14, 2024 reflect the financial position, results of operations and cash flows of the Company as a result of the Business Combination, referred to herein as the “Successor.” 49 Table of Contents Components of Results of Operations Revenue The Company has not had any substantial revenues since the shut-in.
Removed
The Extension Amendment extends the date by which we must consummate our initial business combination from March 1, 2023 to September 1, 2023. On June 13, 2023, Sable and EM entered into a First Amendment (the “ First Amendment ”) to the Sable-EM Purchase Agreement.
Added
The Company’s various operating expenses are the principal metrics used to assess its performance. Operating Expenses • Operations and maintenance . The Company’s most significant costs to operate and maintain its assets are direct labor and supervision, power, repair and maintenance expenses, and equipment rentals. Fluctuations in commodity prices impact operating cost elements both directly and indirectly.
Removed
Pursuant to the First Amendment, Sable and EM agreed to amend the Sable-EM Purchase Agreement to, among other things, provide that the closing of the transactions contemplated by the Sable-EM Purchase Agreement was scheduled to take place on June 30, 2023 (the “ Sable-EM Scheduled Closing Date ”), unless one or more of the conditions to closing described in the Sable-EM Purchase Agreement was not satisfied as of the Sable-EM Scheduled Closing Date, in which case the closing would be held three business days after all such conditions were satisfied or waived, or such other date as the parties may mutually agree in writing, but in no event later than December 31, 2023.
Added
For example, commodity prices directly impact costs such as power and fuel, which are expenses that increase (or decrease) in line with changes in commodity prices. Commodity prices also affect industry activity and demand, thus indirectly impacting the cost of items such as labor and equipment rentals. • Depreciation, depletion, amortization, and accretion .
Removed
The First Amendment also lowered the “Minimum Cash Threshold” (as defined in the Sable-EM Purchase Agreement) from $200,000,000 to $150,000,000. On December 15, 2023, Sable and EM entered into a Second Amendment (the “ Second Amendment ”) to the Sable-EM Purchase.
Added
Depreciation, depletion and amortization are primarily determined under either the unit-of-production method, which is based on estimated asset service life taking obsolescence into consideration. Since being shut in, no depletion or amortization has been recorded for the Successor periods presented. An immaterial amount of depreciation was reflected for idle plants in the historical Predecessor financial statements.
Removed
Pursuant to the Second Amendment, Sable and EM agreed to amend the Sable-EM Purchase Agreement to, among other things, provide that the closing of the transactions contemplated by the Sable-EM Purchase Agreement was scheduled to take place on February 1, 2024 (the “ Second Sable-EM Scheduled Closing Date ”), unless (i) Sable and EM agreed to close on a date prior to the Second Sable-EM Scheduled Closing Date, in which case the closing would be held on such agreed date, or (ii) one or more of the conditions to closing described in the Sable-EM Purchase Agreement were not satisfied as of the Second Sable-EM Scheduled Closing Date, in which case the closing would be held three business days after all such conditions have been satisfied or waived, or such other date as the parties may mutually agree in writing, but in no event later than February 29, 2024.
Added
Also included in the Successor and Predecessor financial statements is the accretion associated with the Company's estimated asset retirement obligations (“ARO”).
Removed
The obligations of EM to consummate the transactions contemplated by the Sable-EM Purchase Agreement were subject to the satisfaction by Sable (unless waived by EM) of, among other conditions, the condition that the amount of Available Cash of Sable was not less than the Minimum Cash Threshold.
Added
The ARO liabilities are initially recorded at their fair value and then are accreted using the Company’s applicable discount rate over the period for the change in their present value until the estimated retirement of the asset. • General and administrative . General and administrative (“G&A”) costs are comprised of overhead expenditures directly and indirectly associated with operating the assets.
Removed
On June 30, 2023, Flame and Sable entered into a Second Amendment to the Merger Agreement, pursuant to which the parties agreed to extend the date by which the parties must consummate the Business Combination, or otherwise either Flame or Sable would be able to terminate the Merger Agreement, from June 30, 2023 to March 1, 2024.
Added
These support services include information technology, risk management, corporate planning, accounting, cash management, human resources, and other general corporate services. For the Predecessor period, any general and administrative expenses that were not specifically identifiable to SYU were allocated to SYU for the year ended December 31, 2023, and for the period from January 1, 2024 to February 13, 2024.
Removed
On August 22, 2023, we issued an aggregate of 7,187,500 shares of Flame Class A common stock to Sponsor, FL Co-Investment, Intrepid Financial Partners, Flame’s independent directors and certain of our executive officers, upon the conversion of an equal number of shares of Flame Class B common stock (the “ Class B Conversion ”).
Added
To calculate a reasonable allocation, aggregated historical benchmarking data from comparable companies with similar operated upstream assets was used to identify general and administrative expenses as a proportion of operating expenses. Increased general and administrative services may be required in the future, commensurate with planned operations activity levels. • Taxes other than income .
Removed
The 7,187,500 shares of Flame Class A common stock issued in connection with the Class B Conversion are subject to the same restrictions as applied to the shares of Flame Class B common stock before the Class B Conversion, including, among other things, certain transfer restrictions, waiver of redemption rights and the obligation to vote in favor of an initial business combination, as described in the prospectus for the Flame IPO.
Added
Management anticipates future increases in ad valorem taxes, in line with the projected restart of production. Results of Operations The comparability of our operating results for the period February 14, 2024 through December 31, 2024 (Successor), the period January 1, 2024 through February 13, 2024 (Predecessor), and the year ended December 31, 2023 (Predecessor) was impacted by the Business Combination.
Removed
After the Class B Conversion, no shares of Flame Class B common stock remained outstanding.

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Other SOC 10-K year-over-year comparisons