Q2 2026 Sable Offshore Corp Earnings Call

August 11, 2026

Speaker #1: Only during the prepared remarks, we will then go into a Q&A session; also, as a reminder, this conference is being recorded today. If you have any objections please disconnect at this time.

Speaker #1: Harrison Brow, you may begin.

Speaker #2: Thank you, Alice. Good morning, everyone. And welcome to our second quarter 2026 earnings conference call. Joining me today to discuss our results are Jim Flores, Chairman and Chief Executive Officer; Caldwell Flores, President and Chief Operating Officer; Gregory Patrinely, Executive Vice President and Chief Financial Officer; and Anthony Duenner, Executive Vice President, General Counsel, and Secretary.

Speaker #2: As well as various other members of the Sable team. Please refer to our website to download a copy of our new investor presentation, posted yesterday.

Speaker #2: As well as our recently filed financial statements, which will both be discussed today. We will actively display the presentation on this webcast and reference certain items by page number, and then proceed to Q&A.

Speaker #2: We will also be making statements during this call that are forward-looking, these statements are based on current expectations and assumptions, and are subject to risk and uncertainties.

Speaker #2: Actual results could differ materially from those described in the forward-looking statements because of factors discussed in our earnings release, in our investor presentation, in the comments made during this conference call, and in our most recent Form 10-K.

Speaker #2: Forms 10-Q, and other reports and filings with the SEC. We do not undertake any duty to update any forward-looking statements. With that, I will turn it over to Jim Flores to begin going through the investor presentation.

Speaker #2: Jim?

Speaker #3: Thanks, Harrison, and good morning, everyone. As promised, we said we'd have a conference call at some point in time. This is our first conference call for earnings from Sable Offshore, so welcome, everyone.

Speaker #3: After looking at page 3 of the presentation, it's more of the summary stuff you've seen before, but page 4 is the milestones achieved and next steps.

Speaker #3: And we've listed them all since the beginning of this SAGAN 25, and then the three updated ones: restarted production with platform heritage in April 26, refinanced the senior secure term to July 26, and commenced commodity hedging program July 26.

Speaker #3: The next steps are restart production of platform Hondo, which is expected at the end of September 26, so we get a full fourth quarter.

Speaker #3: And establish full 3P reserve report expected first quarter 27, and then we refinance the senior secure term B note and convertible senior unsecured notes and potentially install full sales buoy at San Inez unit and continue to legally protect Sable's vested interests and pursue all monetary damages.

Speaker #3: Those are five big milestones ahead of us, and we expect the next 12 months to achieve those. On page 5, which is our corporate update, we're operations, we're going to go through extensively today.

Speaker #3: The second quarter 26 exit rate of all sales are 40,000 barrels a day. It represents a huge growth into what our all sales have been prior to that.

Speaker #3: We kicked off a wireline campaign now that we have all the wells open or potentially open to mitigate water influx and really try to trim up our production to wherever it is efficiently as possible.

Speaker #3: And we're working feverishly on platform Hondo, platform Hondo is 45-year-old platform that's been badly, bad need of restoration. That's probably the best word for it.

Speaker #3: But we're doing great work there. We've got a great team, and so forth, and we're just hoping we can hit that timing in September.

Speaker #3: And then we're working with refineries in the downstream. We brought on a large quantity of oil for the California One Shore refinery market, and we're working our way through that process of making sure everybody's getting comfortable with our oil, the quality of it, and also the volume of it.

Speaker #3: And we're going to detail that in another slide. Our regulatory and legal: we continue to wait on the U.S. District Court for their findings and also the Ninth Circuit as we've been side by side with the U.S.

Speaker #3: federal government working along with the Justice Department to be in a situation where all of the federal regulations that we're adhering to as Sable Offshore are being recognized through the courts.

Speaker #3: We'll continue to update that as we go, but there's no update today. From that standpoint. On the finance side, we completed the refinancing of July 2, 2026, proceeds were entirely the former ExxonMobil senior term that was really key because they had a lot of restrictions.

Speaker #3: ExxonMobil senior term note that we now have a little more flexibility with the current financial structure. It's not optimal for us at this point, but it was a big, big step for us.

Speaker #3: And the commodity hedging program, one of the things we put in place you'll see we've got some floor protection for significant portion of our production.

Speaker #3: Just in case of all the volatility goes the wrong direction, we'll be protected. And then we're looking further balance sheet optimization in 27 once all our wells are on and our reserve report's out there.

Speaker #3: And we're at full power. On the page 4, Gregory, I'm going to turn it over to you and let you take us through the financing overview, what we did, and a couple other financial slides.

Speaker #2: Yeah, sure. Thanks, Jim. So page 6, the refinancing overview, like Jim just mentioned, we completed our bridge refinancing in early July. That fully satisfied and took out the ExxonMobil seller note, seller financing, the prior senior secured term loan.

Speaker #2: We did so with a series of transactions starting with the $675 million senior secured term loan B. This term loan B has a maturity of December 15, 2028, and it was structured as a fully amortizing loan through the maturity of the security itself.

Speaker #2: So that's fully amortizing through a mandatory amortization of 2.5% per quarter in the back half of this year, stepping up to 5% per quarter beginning in 2027.

Speaker #2: It also includes a 100% excess cash flow sweep feature which could potentially accelerate that amortization depending on the prevailing commodity prices. It does have a 1.25 times MOIC minimum takeout, and so we'll certainly be looking to delever on the amortization front and the excess cash flow sweep front, but as Jim mentioned, when we achieve our additional milestones and get a full 3P reserve report, we will be pursuing phase 2 of the refinancing efforts.

Speaker #2: So I think we're very happy to complete this bridge financing to satisfy our obligations with our seller note, ExxonMobil. But we certainly have room to improve on the interest rate front, interest rate reduction, and we look forward to approaching the market here in 2027.

Speaker #2: In addition to the $675 million senior secured term loan B, we issued about 345 million dollars of convertible senior unsecured notes. Those notes, the five-year notes, July 1, 2031 maturity, 6.5% coupon with a $4 per share initial conversion price.

Speaker #2: So overall, we lowered our weighted average cost to debt, but we certainly have room to improve and looking forward to further optimizing the balance sheet.

Speaker #2: In conjunction with those debt securities, we put in place a zero borrowing base, 500 million dollar revolving credit facility. That was designed to allow us to commence that hedging program and fulfill our obligations under the term loan B, meet those minimum hedging requirements by hedging 100% of our Netherlands fuel projected PDP production.

Speaker #2: We have the ability to hedge beyond those minimums and we're currently evaluating adding additional volumes, which we'll get into. Slide 7 is a brief overview of our updated financial guidance, which includes our sales and cost guidance, like Jim mentioned.

Speaker #2: We do have slightly elevated short-term marketing and GP&T deducts reflected here for the back half of '26. We'll get into why we think these issues will be alleviated here.

Speaker #2: In the near term, but it's part and parcel of the California energy market with all the regulatory headwinds and constraints. Our capital structure, as we illustrated on the prior page, enterprise value of 1.9 billion, equity value of 911 million up to $4.75% share price as of August 7.

Speaker #2: Our financial objectives as we mentioned, we fully plan to delever under the terms of the new senior secured term loan B and/or refinance and take out that paper as soon as possible after the after we issue the full 3P reserve report where we get credit for all the PDP reserves that we will bring online at Hondo.

Speaker #2: Here in September, and also all of our PUD locations, which were not included in the prior interim Netherlands fuel report. We'll continue to optimize the balance sheet with the phase 2 of our refinancing, lower our cost of debt, and increase our maturity runway beyond 2028.

Speaker #2: And we will certainly opportunistically manage the convertible notes to minimize any potential dilution there. We have the ability to do that with cash. We'll progress our rating agency discussions in advance of this phase 2 global refinancing of the balance sheet.

Speaker #2: And look forward to continuing those discussions as well. Long term, we still have a one-times net debt, EBITDA leverage target. We fully plan to hit that metric.

Speaker #2: Like I mentioned, we're going to advance the hedging strategy by adding additional floor pricing protection, likely in the 65 to $70 barrel range, to protect the downside relative to our current volumes.

Speaker #2: And then long term, post phase 2 of the global refinancing, we plan to implement our shareholder return program and focus on reducing the share count with share repurchases and instituting a dividend at the appropriate time.

Speaker #2: Slide 8 is our unlevered free cash flow guidance at strip pricing. So we're basically walking through and doing a little bit of math for you here, which leads into the following slide.

Speaker #2: And the value proposition that Sable Offshore creates with the free cash flow profile today. So even with all of the marketing and crude quality constraints, near-term constraints, we're still projected to generate midpoint of 152 million dollars of unlevered free cash flow for the back half of 2026.

Speaker #2: And into 2027, based on a Brent oil price of $75 a barrel, we're projected to generate over 500 million dollars of unlevered free cash flow.

Speaker #2: Slide 9, we believe that the current trading valuation of Sable doesn't fully reflect the projected earnings power, the cash flow profile, and the capital allocation of the company.

Speaker #2: And we think this analysis on slide 9 illustrates that. When you take a look at our levered free cash flow per share, on the top left here, estimated 2027 levered free cash flow per share of $2.19, and you compare that to our peer free cash flow yield of relatively 14%, it's implying a share price of over $15 a share.

Speaker #2: And that represents a 220% premium to our share price as of August 7. It's about $4.75. So we think on a basic outstanding share count basis, and even on a fully diluted share count basis, which includes all of the potential shares from a from the convertible notes, which we believe would be unrealistic, you still have 125% premium today's price.

Speaker #2: So we think the value proposition on our shares is real, and we look forward to we look forward to moving forward as we ramp up this asset, because remember, restarting an asset of this quality and in this scale, the toughest part is it's like flying a plane.

Speaker #2: The hardest parts are takeoff and landing. Right now we're on the ascent, and we're very much looking forward to getting into the fourth quarter and into 2027, cruising in altitude and attacking our financial objectives that are all laid out in front of us.

Speaker #2: Slide 10, this is our current hedging program. We've layered in costless collars, which we were required to we're required to place five days after the closing of the refinancing on July 2, 2026.

Speaker #2: So for the third quarter '26, we've got collars hedged about $26,000 barrels a day, growing to $29,000 barrels a day in the fourth quarter all with $65 floor pricing.

Speaker #2: So in the back half of this year, our ceiling is about $89.39 on Brent. And in '27, recall, these are 100% PDP hedged volumes.

Speaker #2: We've got $25,000 barrels a day, and in 2028, $21,000 barrels a day. We were required to layer in that 100% of PDP volumes per the term loans through maturity.

Speaker #2: So that's why we've layered in these collars. We think they give us solid floor pricing protection to the downside, but also allow us to participate on the upside and certainly with the unhedged volumes as well.

Speaker #1: Great, Greg. Gregory, on the midstream of Brent crude marketing overview on page 11, it's a lot of moving parts here with the California market, but more importantly for us, at SYU, we don't have platform Hondo on, which is our easternmost platform.

Speaker #1: And if you look at the field from west to east, the higher sulfur contents are to the west, and the lower sulfur contents to the east.

Speaker #1: So once we get all the wells on and so forth, we should be able to mitigate most of the sulfur deducts that we got hit with here in the second quarter, and we'll also be dealing with in the third quarter.

Speaker #1: And plus some chemical things we're trying as well that's going to that should work out well. Really appreciate all the refiners working with us because of the magnitude of the flows out of our field.

Speaker #1: They were surprised and from the upside, but we had to make a lot of movements around there. And Chevron's been over backwards trying to help us get all the crude moved.

Speaker #1: With that, we have a plan to debottleneck that with Chevron starting in September, as well as two other refineries that are looking at taking our crude and so forth.

Speaker #1: So we'll have ample output in the Los Angeles refining basin going through the Plains Line 2000. Additionally, there's additional pipelines that we're looking at going north.

Speaker #1: Now the San Pablo Bay pipeline looks like it's going to be in service. Thank you to California Resources. We're looking at being a third-party customer to those guys as well.

Speaker #1: That's another outlet for excess crude. We've got to solve those situations for us to put drilling rigs out here and start increasing production. We want to do that sooner rather than later.

Speaker #1: So we want as many multiple outlets as possible when we hit capacity in certain areas like going south in Line 2000. And then finally, we're moving along with our legal strategy toward getting an offshore buoy off of platform Harmony and SYU.

Speaker #1: It's premature to discuss the ins and outs of that, but that's still hot on our deal, and looking forward to some good work out of Washington, DC to get that in a position where we can start working on that and get it built and funded here in '27 for '28 as a long-term potential safety valve to make sure we have the best marketing for you.

Speaker #1: So all that's in progress. We're working hard on it and so forth. And we feel like here in the third quarter, it's going to be kind of a low point on the marketing.

Speaker #1: All the demurrage charges and things of that nature, and then fourth quarter. Fourth quarter one, we should be improving certainly going into '27. The same thing we're hearing from our refining partners as well.

Speaker #1: On page 12, I mentioned the buoy. We have an illustration where it's sitting off a platform Harmony. This is more of a cartoon at this point in time, but you can see the aspect it gives us a lot of flexibility bypassing the onshore market if we have to and give us a better marketing opportunities here.

Speaker #1: With waterborne crude and the captured California market. Page 13 is just remind everybody, submitted to this asset. The asset has not changed. Prices have changed.

Speaker #1: Marketing has changed. Legal's changed, but this has not changed. San Ynez unit is still the number one field in the United States based on estimated recovery reserves and cumulative production.

Speaker #1: It ranks number four. And page 14, one aspect we're working on is our total reserves. Out here, we've got a tremendous reservoir that has only had 25% of the crude reserves.

Speaker #1: Ultimate recovery taken out of the 671 million barrels are 4.3 of the total barrels produced to date. And we think we have about 10% remaining barrels, about double that amount, which gets up to about a billion 517, which is $899 of the primary forecast, and then our heavy oil forecast below 13 gravity oil, 9 to 13 gravity, another 618 million barrels.

Speaker #1: We have a lot of oil to get out of the ground. We're glad we're getting started finally on it. On page 15 is our operating development plan going forward.

Speaker #1: You see it's very light on capital because of all the wireline work and so forth. Caldwell and his team have commenced a wireline work where we're doing a lot of water mitigation on Hondo excuse me, on Harmony and Heritage.

Speaker #1: Some wells with the high water cut, we're either sliding sleeves on them or putting through tubing plugs, trying to shut off some of the water from the lowest zone and allow the upper zone oil to flow better.

Speaker #1: We're in the middle of that program, and I look forward to some really good results. And also help relieve a lot of our handling capacity issues because of all the so we can get 100% of the wells on production by the fourth quarter.

Speaker #1: Right now, we're constrained because of pump size at Heritage and also we're not making enough gas. At Harmony and Heritage, we run all the compressors.

Speaker #1: We have to get all the wells on. So it's a chicken and egg deal. So we shut off some of the water that we wanted to process onshore, then we'll have room for these wells to bring on more gas to get all the compressors on.

Speaker #1: And with the new pumps, we'll be able to pump it out. So the field is coming on spectacularly. We're still seeing no decline in our production volumes.

Speaker #1: The wells are very strong and so forth. It's just getting consistent topside and unrestrained topside throughput, which is the main goal going forward. On page 16, we talked about the previous perf ads and so forth that we've done.

Speaker #1: It added about 600 barrels a day per perf ad, and we've got several of those planned for '26 and also for '27 that are coming on.

Speaker #1: So we're accelerating that, and we look forward to having a lot of those behind us and enjoying that production starting in '27. On page 17 is an illustration of the massive reservoir we have, covering 77,000 acres.

Speaker #1: There's over 1,400 feet of pay, and many places in the Upper Solisters hadn't even been perforated, and that's easy stuff we're going for, as well as the massive church got tremendous reserves based on development drilling.

Speaker #1: And then the heavy oil stuff, we haven't touched yet, and that's for down the road. On page 18 is our initial drilling inventory, just in the Upper Solisters.

Speaker #1: You think about it, you have these 500 million barrel oil fields sitting on top of each other. There's three of them. With the Upper Solisters, the massive church, and the heavy oil.

Speaker #1: And so forth. And we're just in the next 20 years are just drilling the wells for the Upper Solisters. Long inventory, multi-decade, inventory to drill and produce, but we need to make sure everything's running topside and first-class shape.

Speaker #1: On page 19, you see the investment highlights. We transitioned to federal oversight successfully. We primed for low-cost production growth. So forth, we have a control our costs.

Speaker #1: You can see that in what our capex looks like going forward, and our ability to maintain production if not grow it here in the near term.

Speaker #1: We have a large development inventory. Once we get our marketing debottled and so forth, we'll be looking at putting some rigs out there. And be able to develop that with our large production base, shallow decline.

Speaker #1: Therefore, our maintenance capex is very low, high operational control. We have 100% in control and operate everything. And then linking our crude sales to Brent is important.

Speaker #1: We just got to get rid of the discounts. Our safety and stewardship is outstanding. We continue to pride ourselves there and have continued to get rewarded for that going forward.

Speaker #1: And we're going to continue to conserve the financial policy by advertising our debt until we refinance it. Everything else is in the appendix. Happy to take questions.

Speaker #1: Harris, I'll turn it over to you guys and we'll get some questions and make sure everybody knows what's going on.

Speaker #2: Sure. Thank you, Jim. At this time, we will now answer questions from analysts. Please use the raise hand feature in the webcast. I'll pause a moment while the queue forms.

Speaker #2: Alice.

Speaker #3: Thank you.

Speaker #2: Please proceed with Q&A.

Speaker #3: Thanks, Harrison. As a reminder, at this time, if you would like to ask a question, please click on the raise hand button, which can be found on the black bar at the bottom of your screen.

Speaker #3: When it is your turn, you'll receive a message on your screen from the host allowing you to talk. And then you will hear your name called.

Speaker #3: Please accept and mute your audio and ask your question. We will wait one moment to allow the queue to form. Our first question will come from Lloyd Byrne.

Speaker #3: Jeffrey. Please unmute your line and ask your question.

Speaker #4: Hey, good morning. Thank you for all the information, guys. Can you just walk through the discounts a little bit more? And then what happens when what the discount looks like when you can blend the sulfur?

Speaker #4: And then maybe, Jim, also what are the other options for lowering that discount going forward? And does the SPR play into that? Just how do we think about those on a going concern basis?

Speaker #4: And then I have one quick follow-up.

Speaker #1: Well, with the sulfur and the merge and also the differential and the transportation totals up to 30 bucks a barrel discount. Okay? The sulfur is about 10 bucks out of it in the sulfur and the merge is about 10 bucks out of it.

Speaker #1: We see that being mitigated, as I said, as we bring our platform Hondo to get our field-wide production down below our penalty level. As well as some of the chemical stuff we're doing.

Speaker #1: As well as the merge, it basically we had to cover Chevron's costs as they turned tankers around. And to take our production as quick as they did.

Speaker #1: So we have one more of those to do in the third quarter. So I think here in the second and third quarter, those costs are going to be pretty steady.

Speaker #1: And then going forward in the fourth quarter, that's what we'll see the relief from the merge and also the sulfur get back down to around $20 a barrel.

Speaker #1: And that's what's reflected in the guidance. Now, the $20 a barrel is going to be market-driven because you've got $3 in transportation and $17 worth of diffs at the refinery.

Speaker #1: We're going to continue to work with the refiners to see if we can't mitigate that, but we're not forecasting any change at this point in time.

Speaker #4: Okay. All right. Thanks. And then can you just talk a little bit about what '28's capital program looks like? I mean, obviously, you lowered the capital spent this year, but and then raised it a little bit in '27.

Speaker #4: How does '28 look? And kind of the trajectory going forward there?

Speaker #1: It's page 15, Lloyd. Assuming we don't refinance the debt, page 15, the '28 capital look a lot like '27 and '26. So forth. So it would strictly be wildlife work and so forth.

Speaker #1: If we're able to successfully refinance, then we'd be looking at putting some rigs out there and growing production and accelerating our rig program. But it's up to it all depends on where we are financially and what our balance sheet looks like, Gregory.

Speaker #2: Yeah. Lloyd, great question. Remember, we have capital governors for '27 and '28 for the new senior secured terminal and be of $100 million a year.

Speaker #2: So beyond 2026, we're capped out. Without absence and waiver, at $100 million for '27 and '28. Like Jim mentioned, we got to refinance that.

Speaker #2: We'll have some freedom to adjust the capital budget.

Speaker #1: That'd be a good reason to do it. Also, we have a carve-out of $150 million for a buoy if we get the position to build that.

Speaker #2: Correct.

Speaker #4: Okay. Awesome. Thank you, guys.

Speaker #1: Sure.

Speaker #3: Our next question comes from Michael Farrow at Pickering Energy Partners. You may now unmute your audio and ask your question.

Speaker #5: Good morning. Ken Sable team. Can you hear me okay?

Speaker #2: Yes, we can. All right, Michael.

Speaker #5: Great. All right. Thanks for the confirmation. Look, I think it's safe to say it's been a pretty eventful second quarter of it. Maybe we can just start with the production ramp.

Speaker #5: We recognize there's no guidebook to restarting an asset like the Santinez unit, and this is the first for the Sable team as well. But the production ramp does seem to be going a little slower than expectations.

Speaker #5: At least versus our expectations. So I think what we and others would like is just more confirmation and clarity on what the economics and cash flows are going to look like when the asset reaches its plateau.

Speaker #5: We appreciate the guidance update, and we can kind of piece through the math. But just how confident are you in achieving the run-rate operating costs of roughly $160 and $190 million next year after operating costs were nearly $95 million before considering the demurrage charges in Q2?

Speaker #5: And maybe it's just something as simple as having fewer employees and

Speaker #1: And less work on the platforms . Once reaching a steady state . So anything you could provide detail wise on the operations that would increase confidence in margin guidance going forward would be helpful .

Speaker #2: Yeah . Michael . Great . Great question . I think the key point here is it's not a production issue , right ? It's a third party .

Speaker #2: They're third party sales constraints that have not allowed us to sell all the barrels that we've produced . The wells are performing outstanding like Jim , what Jim laid out .

Speaker #2: I think you've seen that detailed in our earnings materials . We've been filling inventory and in our our 540 000 barrel storage tanks that lost Flores Canyon and trying to deplete that inventory and have run into short term throughput constraints due to third parties .

Speaker #2: So that's part that's part of it . So I feel very , very comfortable about our , our ability to hit our production targets .

Speaker #2: And as these short term constraints on , on the throughput side , both on midstream and the downstream , get alleviated here in the short term , as in the next several weeks to months Or month , by September , we feel like there won't be a disconnect between our ability to produce barrels and our ability to sell the barrels that we produce That's one thing .

Speaker #2: The second item is on the operating cost front . Remember , we're we have a tremendous amount of contract labor and other labor dedicated to restarting these three platforms , which are still in the process of in terms of platform .

Speaker #2: Hondo . Right . We won't be in the restart phase forever . And what we're projecting here is we come out of that , we start coming out of that restart phase in the fourth quarter .

Speaker #2: So what the reason why we provided the 2027 guidance was to give you a look at what fully ramped production and sales would look like , with a more of a steady state operating cost posture .

Speaker #2: And so I would say 27 is a great look . What 27 doesn't include importantly , is any type of waterborne marketing optionality , any type of additional marketing leverage .

Speaker #2: It doesn't include potential chemical solutions that we're looking at to reduce our sulfur content , which , you know , right now , we think could potentially , for every dollar you spend on the chemical , could yield a , you $4 cost savings .

Speaker #2: So none of that is included in our guidance . So we think there's a lot of upside ahead And like I mentioned , like we're on the ascent of of this takeoff .

Speaker #2: And this is a , an asset of the size and the scale that we're going to do it right . And we're not , we're not , we're not managing this business for the next several months .

Speaker #2: We've got a 50 plus year reserve life asset that we're going to , we're going to take care of and make sure that that we and we spend the capital to be safe and all the capital .

Speaker #2: And what you've seen in the capital reduction between our June guidance and now here in August , we've we've deferred any and all capital .

Speaker #2: That's not related to producing more barrel producing and selling more barrels , maintaining safe operations and , and attacking our restart and platform .

Speaker #2: Hondo .

Speaker #3: Right . Gregory . Just add a little bit more to that . You know , the aspect of unintended consequences with the volume of the wells , you know , basically double than what we expected and so forth .

Speaker #3: It's overrun some of the pump capacity of the platforms we've had . We've got new pumps on order that increased that . These are all great problems to have .

Speaker #3: But at the same point in time , you can't get all the wells on that you want because you can't handle all the all the all the production through the pipeline .

Speaker #3: So we're going through that whole process and , you know , there's also another constraint we have is a lot more oil and gas .

Speaker #3: The gas , the gas production is low . So therefore getting , getting all the compressors for the gas lift restarted We're working through all those .

Speaker #3: And there's solutions for it all . But it's , it's , it's , it's , these are all , you know , great problems to have .

Speaker #3: And that's why we pointed everybody during the financing to the fourth quarter of this year will be up . Well , all our marketing contracts or marketing bottlenecks will be will be behind us .

Speaker #3: We've already got we have line of sight to that right now here in August . What we're saying about fourth quarter and , you know , and then all our production will be unconstrained and so forth .

Speaker #3: And we'll have we'll probably have some wireline results as well from there . So we're , we're like , everybody else . It's going to be a long , hot summer .

Speaker #3: The rest of the summer . But we're looking at the fourth quarter and certainly into 27 . You know , really being able to show the asset we have

Speaker #1: All right . That's great . I appreciate the clarification and detailed response . Maybe we can just follow up on that point on the waterborne marketing angle .

Speaker #1: Gregory , when do you think the company be in a position to move forward with that decision to install a sales buoy ? I understand it's maybe a bit premature to discuss , but ultimately you want to try to avoid moving forward with that capital spend .

Speaker #1: If the mainstream constraints are going to alleviate themselves . Of course , there's other considerations in going down that route . So what market signals are you looking for the next six months ?

Speaker #1: And when do you think you would need to make the decision to move forward with the buoy path for a year end ? 28 installation ?

Speaker #3: It's really regulatory . It's not market signals . The market signals are there . It's about , you know , at least a 50% improvement in deaths and so forth .

Speaker #3: And just having the flexibility out there . So we're looking at regulatory aspect that we've got a lot of things , conversations with a lot of federal authorities on what we need to get done and so forth .

Speaker #3: And , and they look at this as an important part of , of security of , of the offshore barrels staying offshore . And so we're waiting to hear on all that .

Speaker #3: We didn't get anything done by the August recess . But this fall is going to be very active once we get that , then we'll have about 4 to 6 months of engineering .

Speaker #3: Another another 6 to 9 months of procurement . So it will be every bit of summer 28 to get get it , getting it installed and getting it put on there .

Speaker #3: So that's , that's , that's pretty hard to move that up at all . But under our timeline , we're , we're right on that schedule right now

Speaker #1: All right . Thanks for your time .

Speaker #3: Sure .

Speaker #4: Our next question comes from Leo Mariani at Roth . You may now unmute your audio and ask your question

Speaker #5: Yeah . Good morning here , guys . Why don't you just follow up on where do you think things stand these days with the potential SPR declaration in California ?

Speaker #5: That's something you think is moving forward at a good pace here .

Speaker #3: Yeah , I think it's getting it's getting wide wide , widespread support from Sepa came out with a big , big 12 page report .

Speaker #3: California Infinite Producers . And it just debottlenecking the whole energy onshore market pipelines and so forth . It desperately needs to happen . It's going to benefit all the all the producers and all the refiners and so forth .

[Company Representative] (Sable Offshore Corp): Have the bottom line, have some wildcat results as well from there. We are like everybody else. It is going to be a long, hot summer the rest of the summer, but we are looking at Q4 and certainly into 2027, really be able to show the asset we have.

Speaker #1: Yes, while on results as well. From there, so we're— we're like everybody else, it's going to be a long, hot summer the rest of the summer, but we're looking at the fourth quarter and certainly into '27.

Speaker #1: You know, really be able to show the asset we have.

Speaker #3: Keep them , keep them in business . It's more connect more pipes , more flexibility . I think that's and we haven't heard any headwinds in DC from it .

[Analyst]: All right. That is great. I appreciate the clarification and detailed response. Maybe we can just follow up on that point of the waterborne marketing angle, Gregory. When do you think the company would be in a position to move forward with that decision to install a sales buoy? I understand it is maybe a bit premature to discuss, but ultimately, you would want to try to avoid moving forward with that capital spend if the midstream constraints are going to alleviate themselves. Of course, there are other considerations when going down that route. What market signals are you looking for in the next 6 months, and when do you think you would need to make the decision to move forward with the buoy path for a year-end 2028 installation?

Speaker #3: We just hear about mechanics . And so and we're looking forward to , you know , seeing some resolution on that this fall

Speaker #5: Okay . Appreciate that . And then also wanted to just touch base on this $500 million kind of no boring base working capital , you know , I guess facility put in place for the hedging .

Speaker #5: Do you see potential for there eventually to be some boring base and some ability for able to draw on that ? Is that something that's restricted until perhaps you guys can , you know , refinance the existing term loan and or the convert ?

[Company Representative] (Sable Offshore Corp): It is really regulatory. It is not market signals. The market signals are there. It is about at least a 50% improvement in diffs and so forth, and just having the flexibility out there. We are looking at the regulatory aspect that we have got a lot of these conversations with a lot of federal authorities on what we need to have and get done and so forth. They look at this as an important part of security of the offshore barrels staying offshore. We will wait to hear on all that. We did not get anything done by the August recess, but this fall is going to be very active. Once we get that, then we will have about 4 to 6 months of engineering, another 6 to 9 months of procurement. So it will be every bit of summer 2028 getting it installed and getting it put on there.

All right, that's great. I appreciate the clarification and detailed response. Maybe we can just follow up on that point in the waterborne marketing angle, Gregory. When do you think the company would be in a position to move forward with the decision to install a sales buoy? I understand it's maybe a bit premature to discuss, but ultimately you want to try to avoid moving forward with that capital spend if the mainstream constraints are going to alleviate themselves. Of course, there are other considerations when going down that route. So, what market signals are you looking for in the next six months? And when do you think you would need to make the decision to move forward with the buoy path for a year-end 2028 installation?

It, it's really regulatory.

Speaker #5: Just trying to get a sense of when you might be able to get more of a regular way , you know , sort of working capital facility .

Speaker #2: Yeah , yeah . This is Gregory . Great , great question . I think the way to think about , you know , increasing the borrowing base would be post , you know , pay down of the term loan .

Speaker #2: The new senior secured term loan , B so we hope to , you know , Delever as quickly as possible . And refinance and take that out , open up the borrowing capacity and then also once we bring platform Honda online , like I mentioned , we'll get additional PDP credit .

Speaker #2: And then our , our credit as well with the development program that we have , once the term loan B capital governors are alleviated .

Um, it's not Market signals, the market signals are there. It's about, you know, at least the 50%, uh, Improvement in in, in, in depths and so forth. And, and just having the flexibility out there. So, we're looking at, uh, regulatory aspect that we, we've got a lot of things, uh, uh, conversation with a lot of federal authorities on what we need to have get done and so forth. And uh, and they look at this as an important part of uh, of of security of the of of the offshore Barrel, say it offshore. And uh, so we'll wait to hear on all that. We we didn't get anything done by the August recess but this fall is going to be very active. Once we get that.

Speaker #5: Okay . Appreciate that . And I guess just on the more fulsome refi , you know , in 2027 , which you guys certainly spoke to post the the reserve report here , can you maybe give us a little bit more color on kind of what the current thinking would be after that happens ?

[Company Representative] (Sable Offshore Corp): I guess that would be hard to move that up at all. Under our timeline, we are right on that schedule right now.

And we'll have about 4 to 6 months of engineering another, another 6, to 9 months procurement. So it'll be every bit of Summer 28th, getting getting it, getting it uh installed and getting to put on there. So I think that's that's that's be hard to move that up at all but under our timeline we're right. We're right on that schedule right now.

[Analyst]: All right. Thanks for your time.

[Company Representative] (Sable Offshore Corp): Sure.

All right, thanks for your time.

Operator: Our next question comes from Leo Mariani at Roth. You may now unmute your audio and ask your question.

Speaker #5: If it's all successful in terms of trying to return capital to shareholders , do you guys kind of try to get a buyback going first , then maybe a dividend comes down the road ?

Sure.

Our next question comes from Leo marani at Ross. You may now unmute your audio and ask your question.

Speaker #5: If you guys are able to reduce the share count , just want to get kind of management's current thinking on how that could proceed .

Leo Mariani: Yeah, good morning here, guys. Wanted to just follow up on where you think things stand these days with the potential SPR declaration in California. Is that something you think is moving forward at a good pace here?

Speaker #3: Yeah . All of the above . The aspect I think initially be some type of dividend . And then and then depending on what oil prices are on the stock buyback , what the board's thinking at this point in time .

Yeah, good morning here guys. Um, wanted to just follow up on. Where do you think things stand uh, these days with the potential uh spr uh declaration uh in California? Is that something you think is moving forward? Uh at a good Pace here

[Company Representative] (Sable Offshore Corp): Yeah. Leo, I think it's getting widespread support from CIPA came out with a big 12-page report, California independent producers, and it just debottlenecks the whole California energy onshore market pipelines and so forth. It definitely needs to happen, and it's going to benefit all the producers and all the refiners and so forth, keep them in business. Just connect more pipes, more flexibility. We haven't heard any headwinds in DC from it. We're just here about mechanics. We're looking forward to seeing some resolution on that this fall.

Speaker #3: But right now it's getting our balance sheet in good shape . And that's why amortizing the debt with the cash flows is acceptable at this point in time .

Speaker #3: We've got we've got the capital light program to keep our production maintained . And so forth . And all the all the improvements are within our in our control .

Speaker #3: So I think next , next year or two is making sure that getting the balance sheet into in a regular way situation where we can have those options .

Speaker #3: But right now , there's obviously going to be no cash leaving the system until we get get get the balance sheet under control .

Yeah. We I think it's getting it's getting wide wide uh widespread support from CIFA came out with a big big 12 page report. Uh uh, California has been producers and it just debottlenecking, um, uh, onto our Market pipelines and so forth. It it, it definitely needs to happen and it's going to benefit all the, all the producers, and all the refiners and so forth. Keep them. Keep them in business is more connect more pipes, more flexibility. I think that's, uh, and, and we, we haven't heard any headwinds in DC from it. Uh, we just need to hear about mechanics

Speaker #5: Okay . Thank you guys .

Speaker #2: Sure .

And so, um, we're looking forward to, you know, seeing some resolution on that this fall.

Leo Mariani: Okay. Appreciate that. I also wanted to just touch base on this $500 million no borrowing base working capital facility put in place for the hedging. Do you see potential for there eventually to be some borrowing base and some ability for Sable to draw on that? Is that something that is restricted until perhaps you guys can refinance the existing Term Loan D and/or the convert? Just trying to get a sense of when you might be able to get in more of a regular way sort of a working capital facility.

Speaker #4: Our last question comes from Charles Meade at Johnson Rice . You may now unmute your audio and ask your question

Speaker #6: Yes . Good morning , Jim , and Gregory . And to the rest of the sales team there , Jim , I'd like to go back to to Leo's question on the SPR .

Speaker #6: I , I heard you correctly . You said you're expecting some kind of resolution this fall on that . And that you've got some enthusiasm , not just from other producers , but also pipeline and refinery operators in California , but that that you're looking for .

Gregory D. Patrinely: Yeah, Leo, this is Gregory. Great question. I think the way to think about increasing the borrowing base would be post pay down of the Term Loan D, the new senior secured Term Loan D. So we hope to de-lever as quickly as possible and refinance and take that out, open up the borrowing capacity. Then also, once we bring Platform Hondo online, like I mentioned, we will get additional PDP credit and then our PUD credit as well with the development program that we have once the Term Loan D capital covenants are alleviated.

Okay, appreciate that. And then also wanted to just uh touch base on this 500 million. Uh kind of know, boring base, working capital uh you know I guess facility you put in place for the hedging. Do you see potential for their eventually to be some boring base and some ability for disabled to draw on that, is that something that's restricted until perhaps you guys can, uh, you know, refinance, the existing Term Loan and or the convert, just trying to get a sense of when you might be able to get more of a regular way, uh, you know, sort of working capital facility.

Speaker #6: What form is that going to take ? And has there been any evolution either on your side or on the government side of what ?

Speaker #6: Of , of , you know , what the what the designation would look like in terms of , you know , assets for that SDR effort

Speaker #3: Charles , you were breaking up , but I think you were talking about what about the designation first . First , it has to be designated SPR .

Speaker #3: And then and then and then you have the power of condemnation by the Department of Energy that can condemn whatever acreage or whatever assets they want for the purpose of , of supporting the SPR .

Yeah, Leo. This is Gregory great. Great, great question. I think the way to think about, you know, increasing the borrowing base would be post, you know, pay down as the term loans and the new senior secured Term Loan Deeds. So we we, we hope to, uh, you know, do do lever as quickly as possible and and, and refinance and take that out, open up the borrowing capacity. And then also, uh, once we bring platform Hondo online, like I mentioned we we'll get additional PDP credit and then our our, our PUD credit as well with with the development program that we have, uh, once the term loan B, capital Governors are alleviated.

Leo Mariani: Okay. Appreciate that. I guess just on the more fulsome refi in 2027, which you guys certainly spoke to post the reserve report here, could you maybe give us a little more color on what the current thinking would be after that happens if it is all successful in terms of trying to return capital to shareholders? Do you guys kind of try to get a buyback going first, then maybe a dividend comes down the road if you guys are able to reduce the share count? Just want to get management's current thinking on how that could proceed.

Speaker #3: So that's , that gives a lot of flexibility . Plus also be able to connect pipes that are right now inefficiently , not connected .

Speaker #3: And be able to leave a lot of marketing constraints for everybody . So it's not because you want to have as much oil going into the SPR as you want to have much lower Q1 out of the SPR , into the into the refinery .

Speaker #3: So it gives it gives the federal government broad powers to make sure that the California energy sector will start being efficient and be able to be able to maintain its current production levels and also , more importantly for us is maintain maintain the refineries .

Okay, appreciate that. And I guess, um, just on the more wholesome refi, you know, in 2027, what you guys certainly spoke to, uh, post the Reserve report here. Could you maybe give us a little bit more color on kind of what the current thinking would be after that happens? Um, if it's all successful, in terms of trying to return capital to shareholders, do you guys try to get a buyback going first? Then maybe a dividend comes down the road if you guys are able to reduce the share count? Just want to get kind of management's current thinking on how that could proceed.

[Company Representative] (Sable Offshore Corp): Yeah, all of the above. The aspects I think initially be some type of dividend, then we will, depending on what oil prices are on the stock buyback, is where the board's thinking at this point in time. But right now it is getting our balance sheet in good shape, and that is why amortizing the debt with the cash flows is successful at this point in time. We have got the real capital light program to keep our production maintained and so forth, and all the improvements are in our control. So I think next year or 2 is making sure that getting the balance sheet in the regular way situation where we can have those options. But right now, there is obviously going to be no cash leaving the system until we get the balance sheet under control.

Yeah, all of the above. Uh, the aspect, I think,

Speaker #3: That's the big thing is support . The providers are there and will that will that restart of Valero , Benicia or not ? I don't know , a lot of entrepreneurs are out here looking at it here in Houston and stuff .

Speaker #3: But I mean , it could it could add refineries , but for sure at least keep the ones that are there in business .

Speaker #3: And we got broad support from that from everybody . I'd say we , the , the Department of Energy does . So hopefully , hopefully we'll get we'll get that across the line sometime .

Speaker #3: This this fall

Speaker #6: Okay . Can you guys still hear me or is it am I going .

Speaker #3: Yeah . You're good . Now you're better now .

Speaker #6: Okay ,

Speaker #7: Great .

In, in good shape. And that's why advertising. The debt with the cash flows is, is successful at this point in time, we've got we've got the real Capital like program to keep our production, uh, to maintained and so forth and and all the, all the improvements are within our in our control. So, I think next next year too, is making sure that getting the balance sheet in the in the regular way situation where we can have those options for right now. There's obviously going to be no cash leaving the system until we get get, get the balance sheet under control.

Leo Mariani: Okay. Thank you, guys.

Speaker #6: Thank you . Jim . Follow up question on the on the declines you're seeing or maybe or maybe the lack of declines you're seeing are you are you seeing any change in the in the flowing pressure of the wells and , you know , and I'm curious what impact do you foresee this will have on your on your updated , you know , £0.03 report that's coming in just specifically wondering , do you think the how much history are the reserve engineers going to want to see before they give you credit for a lower decline ?

[Company Representative] (Sable Offshore Corp): Sure.

Okay, thank you guys.

Yeah.

Operator: Our last question comes from Charles Meade at Johnson Rice. You may now unmute your audio and ask your question.

Our last question comes from Charles Me at Johnson Rice. You may now unmute your audio and ask your question.

Charles Meade: Yes. Good morning, Jim and Gregory, and to the rest of the Sable team there. Jim, I would like to go back to Leo's question on the SPR. If I heard you correctly, you said you expect some kind of resolution this fall on that, and that you have got some enthusiasm, not just from other producers, but also pipeline and refinery operators in California. What form is that going to take? Has there been any evolution, either on your side or on the government side, of what the designation will look like in terms of assets for that SPR effort?

Yes, good morning, Jim and Gregory, and to the rest of the table team there. Um, Jim, I'd like to go back to, uh, to Leo's question on the SDR. Uh, if I heard you correctly,

Speaker #6: And are they going to give it to you just on the wells that you that you've been able to produce , or do you think they're going to give it to you more on a field wide basis ?

You said you expect some kind of resolution this fall on that and, and that you've got, uh, some enthusiasm not just for other uh, producers but also uh, Pipeline and and Refinery operators in California.

Speaker #3: Yeah , we float all the wells . Charles . I mean , the aspect of that , and we'll have enough production history on everything to whether they'll be able to do it on a field wide basis .

Speaker #3: Yeah , I it we're seeing we're seeing no decline in the field . So it's a massive field , but I'm sure we'll we'll , we'll , we'll all coalesce around a 6 or 7% field wide decline going forward , which is , which has been this historical you know , it's made 100 , you know , 671 million barrels with a 7% decline .

What, uh, that solution that you're looking for, what form is that going to take? And has there been any evolution, either on your side or on the government side, of what?

Do any of you know what the, uh, what the designation will look like in terms of, you know, assets for that SDR effort?

[Company Representative] (Sable Offshore Corp): Well, Charles, you were breaking up, but I think you were talking about this designation. First, it has to be designated as SPR, and then you have the power of condemnation by the Department of Energy. They can condemn whatever acreage or whatever assets they want for the purpose of supporting the SPR. That gives it a lot of flexibility, plus also to be able to connect pipes that are right now inefficiently not connected and be able to relieve a lot of marketing constraints for everybody. You want to have as much oil going into the SPR, as you want to have much oil going out of the SPR into the refineries. It gives the federal government broad powers to make sure that the California energy sector will start being efficient and be able to maintain its current production levels.

Speaker #3: You know , eventually that that that will it will revert to that . And that's , that's , that's where the physics is going to be .

Speaker #3: We're certainly enjoying the production with no decline rate , but at some point in time and when , when , when you get that pressure drop a little bit and the GR goes up , will be making more gas , be able to run our compressors will actually be able to effectively bring on more production and wells that have high water cuts that we can't bring on right now because of the lack of gas .

Speaker #3: So the field will actually run a little better and probably see a 10 or 15% increase in production volumes and also some gas sales at that point in time .

Speaker #3: So it's it's , there's , there's , there's a pool , there's going to be this year or next year , it's whether the , whether the fields start to decline .

[Company Representative] (Sable Offshore Corp): And also, more importantly for us, maintain the refineries. That is the big thing, is support the refineries that are there. Will that restart of Valero Benicia? I do not know. There are a lot of entrepreneurs around here looking at it here in Houston and stuff. It could add refineries, but for sure it will at least keep the ones that are there in business. We got broad support on that from everybody. I say we, the United States Department of Energy does. Hopefully, we will get that across the line sometime this fall.

Speaker #3: But it will at some point in time . So you can use that 7% decline . And that's what we've been , we've been we've been steady in our all of our projections .

Well, Charles you were breaking up, and I think we were talking about, what about the designation first first? It has to be designated SDR. And then with then, and then you have the power of condemnation by the department of energy that can condemn, whatever acreage or whatever assets they want. That's for the purpose of uh of supporting the spr. So that's that gives you a lot of flexibility. Plus also be able to connect pipes uh uh that are right now in officially not connected and uh be able to leave a lot of marketing constraints for everybody. So that it's got so that you want to have as much oil going into the SBR as you want to have much oil coming out of the SBR into the into the refineries. So uh it gets it gives the the federal government broad power to make sure that the the California energy sector will start being efficient and be able to be able to maintain its current production levels and also make more importantly for us to maintain maintain, the refinance. That's the big thing is support, the products that are there and will that, will that restart a, a Valero Venicia. Not, I don't know. This says a lot of entrepreneurs that are out here looking at it.

Speaker #3: I think the Netherlands , Sewell pre-production decline rates on their reports like 21% and 16% in the first two years , which just protection for everybody in themselves , investors and so forth .

Speaker #3: And they fully recognize the , the , the way the fields perform and looking forward to making sure we all coalesce around that field wide decline .

Uh here in Houston and stuff. But I mean you could you could add refineries, but for sure at least keep the ones that are there in business and we got broad support from that from everybody. I say we the, the the department of energy does. So hopefully, uh, hopefully, we'll we'll get, we'll get that across the line sometime this, uh, this fall.

Charles Meade: Okay. Can you guys still hear me, or am I gone?

[Company Representative] (Sable Offshore Corp): Yeah, you are good now. You are better now.

Speaker #6: That's great . Detail . Thank you . Jim .

Charles Meade: Great. Thank you. Jim, a follow-up question on the declines you are seeing or maybe the lack of declines you are seeing. Are you seeing any change in the flowing pressure of the wells? I am curious what impact you foresee this will have on your updated 3P reports coming in. I am specifically wondering, how much history are the reservists here is going to want to see before they give you credit for a lower decline? Are they going to give it to you just on the wells that you have been able to produce, or do you think they are going to give it to you more on a field-wide basis?

Speaker #3: Sure .

Okay. Uh, can you guys still hear me, or is it—uh, my God. Yeah, you're good. You're better now. Okay, great.

Speaker #4: Our last question comes from Noel Parks at Tui Brothers Investment Research . You may now unmute your audio and ask your question

Thank you, thank you. Um, follow-up question on the declines you're seeing, or, or maybe, or maybe the lack of declines you're seeing.

Speaker #8: Hi . Good morning . I just wondered with platform Hondo , you mentioned that it's in a process of restoration . Could you just talk a bit more about what's entailed in that ?

Speaker #8: And is there any of any of it ? Is in addition to what you originally anticipated the work is that you'd have to do

Speaker #3: Well We really anticipated a lot of work at platform Hondo , like a 45 year old platform and , and , but , but the amount of work did surprise us .

Uh, are you, uh, are you seeing any, uh, change in the, uh, in the flowing pressure of the wells and, uh, you know, and I'm curious what impact you perceive this will have on your, uh, on your updated, uh, you know, 3P report that's coming in. I'm just specifically wondering, do you think that—how much history are the reserve engineers going to want to see before they give you credit for a lower time? And—

[Company Representative] (Sable Offshore Corp): Yeah. We flowed all the wells, Charles, so I mean, the aspect of that, and we'll have enough production history on everything to whether they'll be able to do it on a field-wide basis. Yeah, we're seeing no decline in the field. It's a massive field. I'm sure we'll all coalesce around a 6% or 7% field-wide decline going forward, which has been this historical. It's made 671 million barrels with a 7% decline. Eventually, it will revert to that, and that's where the physics is going to be. We're certainly enjoying the production with no decline rate, but at some point in time, when you get that pressure drop a little bit and the GOR goes up, we'll be making more gas. We've got to run our compressors.

Are they going to give it to you just on the wells that you—that you've been able to do so? Or do you think they're going to give it to you more on a field-wide basis?

Speaker #3: I mean , we've had probably about 50% more work than we expected . A lot of structural work that we didn't expect and so forth .

Speaker #3: That the , the , the platform was in dire need of wasn't near , in good shape as harmony and heritage , it's just older and , and maybe less maintained from that standpoint .

Speaker #3: So we've , we've taken upon ourselves to basically rebuild that platform in place . And we're going to have a first class , first class facility , probably be the most sought after site in the whole field of we'll have new living quarters .

Speaker #3: Do everything from the standpoint , but also the , the controls had to be completely changed out where the where the harmony and heritage controls just had to be updated and so forth .

Yeah, we we float all the wells, uh, Charles. I mean, the aspect of that and we'll have enough production industry on everything to whether to be able to do it or feel wide basis. Yeah. I it it, we're seeing it up. We're seeing no decline in in the field. So it's a massive field but I'm sure we'll, we'll we'll, uh, we'll all coalesce around a, a 6 or 7% field wide decline, uh, going forward which is, which has been this historical. Uh, you know, it's made a 100, you know, 671 million barrels with a 7% decline, you know, it eventually that that that will it will revert to that and that's that's that's where the phys.

Speaker #3: So it's , going to be a brand new platform when we finish with it . And we're looking forward , we're looking forward to that .

[Company Representative] (Sable Offshore Corp): We'll actually be able to effectively bring on more production in some wells that have high water cut that we can't bring on right now because of the lack of gas. The field will actually run a little better, and probably we'd see a 10% to 15% increase in production volumes and also some gas sales at that point in time. There's a pool, whether it's going to be this year or next year, as whether the field will start to decline, but it will at some point in time. You can use that 7% field-wide decline. That's where we've been steady in all of our projections. I think the Netherland, Sewell pre-production decline rates on their reports like 21% and 16% the first 2 years, which is just protection for everybody and themselves, investors, and so forth.

Speaker #3: And because we . We're going to . It also , our gas sales go through that platform as well . So we had to make sure that was in good shape and the guys , have done a masterful job there .

Speaker #3: And we've got we've got so many people in contractors there . We're moving logistics and people from other platforms , staying at other platforms .

Speaker #3: So that platform to do work every day . So we continue to be safe and real impressed with the work that Caldwell and Trent and those guys and Group has done

Speaker #8: Great . Thanks . And I was thinking about in terms of geological work , sort of just what I guess the first on the agenda for further testing of the the upper Silicious and sort of , you know , what's kind of the most economical way to go about that ?

[Company Representative] (Sable Offshore Corp): They fully recognize the way the field's performing and looking forward to making sure we all coalesce around that field-wide decline.

Speaker #8: I assume it's maybe completion of hole and , you know , what sort of cost and would that be and what sort of data are you looking for next ?

Well, the the the field started to climb but it will at some point time. So you can use that 7% to your wide Decline. And that's what we've been. We've been, we've been uh, steady in our all of our projections. I think the Netherlands School pre-production, uh, decline rates on their reports like 21%. And 16% the first 2 years, which is just protection for everybody and themselves investors so forth and they fully recognize the, uh, the the, the way the fields perform and looking forward to making sure we we all call us around that that field logic class.

Charles Meade: That's great detail. Thank you, Jim.

[Company Representative] (Sable Offshore Corp): Sure.

That's great detail. Thank you, Jim.

Operator: Our last question comes from Noel Parks at Tuohy Brothers Investment Research. You may now unmute your audio and ask your question.

Sure.

Speaker #8: There ?

Speaker #2: Yeah .

Speaker #3: Well , the . Upper is going to be our main target for all of our , our repairs , our perf ads basically going up hole like , like we show in the illustration on page 17 .

Our last question comes from no parks at 2i. Brothers investment research, you may now unmute your audio and ask your question.

Noel Parks: Hi. Good morning. I just wondered with Platform Hondo, you mentioned that it is in a process of restoration. Could you just talk a bit more about what is entailed in that and if any of it is in addition to what you originally anticipated the work is that you would have to do?

Speaker #3: And also talk about in 15 and 16 . But the big thing on upper solutions is once , once we're out there and we're , we have in a position to grow volumes with drilling rigs , that's going to be our , our main target .

Hi, good morning. Um, I just wondered, with Platform Honda, uh, you mentioned that it's in a process of restoration. Could you just talk a bit more about what's entailed in that, and, uh, is there any of it that is, um,

Speaker #3: And that showed up on page 18 , which is the , which is our location . We have over 100 , 125 locations just in the upper Silicious .

Uh, in addition to what you originally anticipated, um, the work is that you'd have to do.

[Company Representative] (Sable Offshore Corp): Well, we originally anticipated a lot of work at Platform Hondo, like a 45-year-old platform. The amount of work did surprise us. We have had probably about 50% more work than we expected, a lot of structural work that we did not expect, and so forth, that the platform was in dire need. It was not nearly in as good a shape as Harmony and Heritage. It is just older and maybe less maintained from that standpoint. We have taken it upon ourselves to basically rebuild that platform in place, and we are going to have a first-class facility. It would probably be the most sought-after site in the whole field. We will have a new living quarters, new everything from that standpoint. The controls had to be completely changed out, where the Harmony and Heritage controls just had to be updated, and so forth.

Speaker #3: We've got another 50 locations , 50 to 75 in the massive chert . That's been the main producer , just in the updip locations .

well uh we originally anticipated, a lot of work at platform on there, like it was a 45 year old platform and um,

Speaker #3: And then we got to redraw the whole field again for the heavy oil . So the . Upper silicious over the next decade is going to be one of the key , key development deals .

Speaker #3: And as some of the most recent wells drilled in 2015 , like two of them in the upper , some of some more prolific producers at this point in time .

Speaker #3: So we're just waiting to get our hands on it . But we certainly not going to put rigs out there until we have our our marketing , our pipeline bottlenecks and all that stuff done .

Speaker #3: And refiners all in good shape and want to take more oil than we actually can grow production with the two drilling rigs that we're going to put out there , but we're looking forward to that time .

Speaker #3: And then just taking these steps , the steps to get there very deliberately and and , and , and looking forward to achieving full cash flow and full production .

[Company Representative] (Sable Offshore Corp): It is going to be a brand-new platform when we finish with it. We are looking forward to that. Our gas sales go through that platform as well, so we had to make sure that was in good shape. The guys, again, have done a masterful job there. We have got so many people and contractors there. We are moving logistics and people from other platforms, staying at other platforms, to that platform to do work every day. We continue to be safe and really impressed with the work that Caldwell and Trent and their group has done.

Speaker #3: 27 so we got some options

Speaker #8: Great . Thanks a lot .

Speaker #3: Sure .

Speaker #4: There are no further questions on the line . This concludes today's Q and

Uh, and but but uh the amount of work did surprises, I mean we we've had probably about 50% more work than we. We expected a lot of structural work that we didn't expect and so forth that uh, uh the the the platform was in dire need, it wasn't near in the good of shape as Harmony inheritance, it's just older and and, and maybe less maintained from that standpoint. So we've, uh, we've taken upon ourselves to basically rebuild that platform in place and, uh, we're going to have a first class first class facility. It probably be the most, uh, sought after uh, site in the whole field of of New. Living course, do everything from the standpoint but also the the controls had to be completely changed out where where the uh, Harmony and are inheritance control. Just had to be updated and so forth. So it's it's, it's going to be a brand new platform when we finish with it. Uh, and, uh, uh, we're looking for, we're looking forward to that and because we, we got, but also, our gas sales go through that platform as well. So we had to make sure that was in good shape. Uh, and uh, the guys again.

Speaker #2: Thank you , everyone , for your participation in today's earnings . Earnings call . We appreciate it . Goodbye

A matchable job there and we've got we got so many people in contractors there. Um uh we're moving Logistics to people from other platforms, staying at other platforms for that platform to do work every day. So uh we continue to be safe and uh really impressed with the work that call Will and Trenton those guys and their group is not

Noel Parks: Great, thanks. I was thinking about, in terms of geological work, what is, I guess, the first on the agenda for further testing of the Upper Sisquoc, and what is the most economical way to go about that? I assume it is maybe re-completion and uphole. What sort of cost would that be, and what sort of data are you looking for next there?

Great. Thanks and um, was thinking about in terms of geological work um, sort of just what? Um,

I guess the first on the agenda for, uh, further testing of the upper siliceous and, sort of, you know, what's kind of the most economical way to go about that. I assume it's maybe recompletion and uphole, and, um, you know, what sort of cost would that be? Um, what sort of data are you looking for next there?

[Company Representative] (Sable Offshore Corp): Well, the Upper Sisquoc is going to be our main target for all of our reperfs, our perfs, basically going uphole like we show on the illustration on page 17, and also talk about in 14, 15, and 16. But the big thing on Upper Sisquoc is once we are out there and we are in a position to grow volumes with drilling rigs, that is going to be our main target. That showed up on page 18, which is our locations. We have over 100, 125 locations just in the Upper Sisquoc. We have another 50 locations, 50 to 75 in the Monterey Chert. That has been the main producer just in the upstructure location. Then we have to redrill the whole field again for the heavy oil.

Yeah. Well

Target for all of our repurposed, our perfect. Basically going to uphold, like we show these illustrations on page 17 and also talk about the important points on pages 15 and 16. But the big thing on upper siliceous is once—once.

Once we're out there and we're—we have, uh, in a position to grow volumes with driller rigs, that's going to be our main target.

And that's showed up on page 18, which is our, uh, which is our location. We have over 100, 125 locations just in the upper—

Commercial issue.

We got another 50 locations, 50 and 75. And the massive church that's in the main producer just in the updated location.

[Company Representative] (Sable Offshore Corp): The Upper Sisquoc over the next decade is going to be one of the key development deals, and several of the most recent wells they drilled in 2015, I think two of them in the Upper Sisquoc are some of the more prolific producers at this point in time. So we are just waiting to get our hands on it. We are certainly not going to put rigs out there till we have our marketing, our pipelines, debottlenecks, and all this stuff done, and refiners all in good shape and want to take more oil. Then we actually can grow production with the two drilling rigs that we are going to put out there. But we are looking forward to that time and then just taking these steps to get there very deliberately and looking forward to achieving full cash flow at full production in 2027 so we got some options.

And then we got to redraw the whole field again. So the heavy oil. So the upper split just over the next decade is going to be a 1 of the key, uh, key development deals and and it's it's several of the most recent Wells. They drilled in 2015, I think 2 of them in the upper solution, some of some more prolific producers at this point in time.

So uh, we we waiting to get our hands on it. We so so I'm not going to put rigs out there until we have our our marketing, our pipelines de bottlenecks and all that stuff, done and and refiners all in good shape, they want to take more oil and then we we actually can grow production with the with the 2 drill and rigs that we're going to put out there.

But we're looking forward to that time, and then just taking these steps, the steps to get there. Very deliberately and, uh, and uh, and, and looking forward to achieving full, cash flow and full production of 27. So we got some options.

Noel Parks: Great. Thanks a lot.

[Company Representative] (Sable Offshore Corp): Sure.

Great. Thanks a lot.

Operator: There are no further questions on the line. This concludes today's Q&A.

Sure, yeah. No further questions on the line.

Gregory D. Patrinely: Thank you everyone for your participation in today's earnings call. We appreciate it. Goodbye.

Thank you, everyone.

Thank you for your participation in today's earnings call. We appreciate it.

Goodbye.

Operator: Thank you for joining the Sable Offshore Corp. Investor Update Call. You may now disconnect.

Thank you for joining, the Sable offshore Corp, investor update call you may now. Disconnect

Browse all earnings call transcripts

Q2 2026 Sable Offshore Corp Earnings Call

Request TrialDemo

Event Details

Sable Offshore

SOC

Earnings

Q2 2026 Sable Offshore Corp Earnings Call

Tuesday, August 11th, 2026 at 3:00 PM

Open Event Documents

Search Transcript

Enter a search term to find quotes

Sable Offshore

Earnings