Sable Offshore Corp.: Q2 FY2026 earnings call

What management said about Q2 FY2026, from the documents filed with the SEC on 10 August 2026: press release. Guidance figures: 1 raised, 1 lowered, 5 new. The quarter’s numbers.

Key takeaways

First full quarter of revenue: Total revenue of $137.1 million and $9.4 million of operating cash flow, described as the first full quarter of revenue and positive operating cash flow since inception. Source
Oil sales exit rate near 40,000 barrels: Oil sales exited the quarter at about 40 thousand net barrels per day, a 149% increase from the first day of the quarter. Source
Summer sales estimates rising: Preliminary July sales were about 38,000 gross barrels per day; August sales averaged about 42,000 gross barrels per day through August 9. Source
Downstream cap at 40,000 barrels: From July, downstream partners limited oil sales throughput to 40,000 average gross barrels per day. Management expects relief starting in the back half of August. Source
Refiners limiting Pacific OCS crude: A sudden supply influx of Pacific OCS crude led refiners to limit throughput and apply quality deducts for sulfur content and other items. Source
Refinancing completed July 2: Proceeds repaid the former term loan and extended maturities to year-end 2028. Source

“We are encouraged by the productivity of the wells at the SYU with their higher than expected production with minimal to no observable decline.”
Jim Flores, Chairman and Chief Executive Officer

Guidance

Area	Period	Figure	Against last quarter
Gross average daily sales Source	2H 2026E	47,500 ‒ 52,500 Boe/d
Gross average daily sales Source	FY 2027E	50,000 ‒ 55,000 Boe/d
Net average daily sales Source	2H 2026E	40,000 ‒ 45,000 Boe/d
Net average daily sales Source	FY 2027E	42,500 ‒ 47,500 Boe/d
Working interest / net revenue interest Source	2H 2026E and FY 2027E	83.6%
Estimated marketing and GP&T deduct Source	2H 2026E	$24.00 ‒ $28.00 per Bbl
Estimated marketing and GP&T deduct Source	FY 2027E	$21.00 ‒ $25.00 per Bbl
Lease operating expense per net Boe Source	2H 2026E	$17.00 ‒ $21.00
Lease operating expense per net Boe Source	FY 2027E	$9.00 ‒ $12.00
Cash general and administrative per net Boe Source	2H 2026E	$6.00 ‒ $9.00
Cash general and administrative per net Boe Source	FY 2027E	$3.50 ‒ $6.50
Severance and ad valorem taxes Source	2H 2026E	0.5% ‒ 1.0% of revenue
Severance and ad valorem taxes Source	FY 2027E	0.5% ‒ 1.0% of revenue
Total capital expenditures Source	2H 2026E	$75 ‒ $95 million; midpoint $85 million	Lowered
Total capital expenditures Source	FY 2027E	$80 ‒ $100 million
Oil ratio Source	FY 2027E	approximately 100%	Raised from approximately 91% prior midpoint
Brent collars, bought put and sold call Source	July 1 to December 31, 2026	28.0 Mbo/d; $65.00 put; $89.39 call	New
Brent collars, bought put and sold call Source	FY 2027	25.0 Mbo/d; $65.00 put; $80.00 call	New
Production wells online, Harmony and Heritage Source	Q3 2026	77 wells	New
Perf Adds at Platform Hondo Source	September 2026 restart	5 Perf Adds at about 600 gross bopd each	New
Perf Adds at Platform Hondo Source	early Q4 2026	4 Perf Adds at about 600 gross bopd each	New

What changed from last quarter

Guidance lowered: Second-half 2026 midpoint capex reduced 41% to $85 million, described as aimed at optimizing cash flow and accelerating debt amortization. Source
Guidance raised: FY 2027 expected oil ratio raised to about 100% from a prior midpoint of 91%. Source
New: Refinancing transactions completed July 2, 2026, repaying the former term loan and extending maturities to year-end 2028. Source
New: Commodity hedging program commenced with Brent floor prices of $65 per barrel. Source
New: From July 2026, downstream partners limited Sable's oil sales throughput to a maximum of 40,000 average gross barrels per day. Source
New: A third-party acquisition of the Crimson Utilities pipeline network is pending, which could provide relief to California producers once it restarts. Source

Results and cash flow

First full quarter of revenue: Total revenue of $137.1 million and $9.4 million of operating cash flow, described as the first full quarter of revenue and positive operating cash flow since inception. Source
Oil sales exit rate near 40,000 barrels: Oil sales exited the quarter at about 40 thousand net barrels per day, a 149% increase from the first day of the quarter. Source
Capital spending in the quarter: Capital expenditures in the second quarter totaled $39.4 million. Source

Production and well ramp

Average net sales near 21,000 barrels: Average daily net sales were about 21 thousand barrels of oil per day while production increased and midstream constraints were worked through. Source
Wells online rose about 50%: Wells online averaged about 39 in June 2026, up 50% from about 26 in April 2026. Source
Per-well rate of 723 barrels: Production averaged 723 barrels of oil per day per well across an average of 35 producing wells per day during the quarter. Source
Summer sales estimates rising: Preliminary July sales were about 38,000 gross barrels per day; August sales averaged about 42,000 gross barrels per day through August 9. Source
Harmony and Heritage ramp under way: In July about 47 wells at Platforms Harmony and Heritage were online, averaging about 721 gross barrels of oil per day per well. Source

“we look forward to working with our midstream and downstream partners to maximize the amount of domestic crude oil from the SYU getting to market”
Jim Flores, Chairman and Chief Executive Officer

Midstream and marketing constraints

Downstream cap at 40,000 barrels: From July, downstream partners limited oil sales throughput to 40,000 average gross barrels per day. Management expects relief starting in the back half of August. Source
Refiners limiting Pacific OCS crude: A sudden supply influx of Pacific OCS crude led refiners to limit throughput and apply quality deducts for sulfur content and other items. Source
Las Flores Canyon inventory built: Crude inventory at Las Flores Canyon rose 49% during the quarter. About 224,000 barrels were held as of August 9, 2026. Source
Sulfur content expected to normalize: Platform Hondo's lower-sulfur oil is expected to bring field-wide sulfur back to normal levels after its planned September restart. Source

Pricing, hedging and costs

Brent hedges start at $65 floors: The hedging program started with $65 per barrel Brent floor prices, and post-closing requirements of the term loan were fulfilled. Source
Demurrage charges hit operating costs: Refineries displaced imported cargoes, which led to $18.5 million of non-recurring demurrage charges recognized in operating expenses. Source

Capital spending and budget

Second-half budget focused on integrity: Given midstream constraints and widened differentials, the second-half 2026 capex budget focuses on asset integrity, midstream throughput, Perf Adds and well optimization. Source
Guidance excludes marketing benefits: Guidance assumes no benefit from waterborne marketing, chemical treatments or broader California infrastructure improvements. Source
FY 2027 reflects normalized operations: FY 2027 guidance reflects the expected normalization of fully ramped operations following the restart. Source
Gas plant items deferred: The 2027 oil ratio increase reflects deferral of POPCO gas plant capital items and a stronger oil cut from producing wells. Source

Debt refinancing and equity

Refinancing completed July 2: Proceeds repaid the former term loan and extended maturities to year-end 2028. Source
Term loan terms set: The $675.0 million term loan B has a 15.0% coupon, amortization of 2.5% per quarter in 2H 2026 rising to 5.0%, and a 100% excess cash flow sweep. Source
Convertible notes and stock issued: The company issued $345.0 million of 6.5% convertible notes due 2031 at a $4.00 conversion price, and $115.0 million of common stock at $3.08 per share. Source
Revolver borrowing base at zero: The $500.0 million revolving credit facility is designed for commodity hedging, has a $0 borrowing base, and matures December 15, 2028. Source
No ATM sales in third quarter: No ATM equity sales had occurred in the third quarter to date. The earlier ATM program had raised about $95.0 million gross through Q1 2026.
Share count rose in quarter: Common stock outstanding ended the quarter at 154,531,910 shares. Source

Coming up, as management said on 10 August 2026

Platform Hondo restart in September: Platform Hondo is expected to restart in September 2026, with five completed Perf Adds expected online there. Source
Harmony and Heritage wells to come online: All 77 production wells on Platforms Harmony and Heritage are expected online during the third quarter of 2026. Source
Four more Perf Adds in fourth quarter: Four additional Perf Adds at Platform Hondo are planned for completion and to come online in early fourth quarter 2026. Source
Throughput constraint expected to ease: The downstream throughput constraint is expected to be alleviated starting in the back half of August. Source
Refineries adjust crude slate: California refineries are expected to start accepting more Pacific OCS barrels from the SYU starting in September 2026. Source
Chemical sweetening tests planned: Chemical-based solutions are expected to be tested in Q4 2026, with full implementation anticipated in 2027. Source
Waterborne marketing talks near-term: Active negotiations are under way to use existing Los Angeles-area marine terminals for waterborne crude marketing in the near term. Source
Crimson pipeline sale pending: A third-party acquisition of the Crimson Utilities pipeline is pending and could add California marketing options once it restarts. Source
More hedging as production ramps: The company expects to opportunistically hedge additional volumes as production ramps up. Source
Wireline campaign underway: A wireline campaign for Perf Adds and well optimization at Platform Harmony began in August 2026. Source

Figures management reported

Figure	Reported
Average daily net oil sales, Q2 2026 Source	approximately 21 thousand barrels of oil per day
Oil sales exit rate, end of Q2 2026 Source	approximately 40 thousand net barrels of oil per day
Average producing wells per day, Q2 2026 Source	35
Oil rate per well, Q2 2026 Source	723 barrels of oil per day
Capital expenditures, Q2 2026 Source	$39.4 million
Las Flores Canyon crude inventory, end of Q2 2026 Source	316,495 barrels
Gross oil sales, July 2026 preliminary Source	approximately 38,000 gross barrels of oil per day
Brent hedge floor price Source	$65/Bbl

Risks management discussed

Operational: Downstream partners capped oil sales throughput at 40,000 average gross barrels per day from July. Source
Demand: Refiners limited Pacific OCS throughput and charged quality deducts, which the company says affected its marketing. Source
Operational: Field-wide sulfur content is above normal levels until the planned Hondo restart brings lower-sulfur oil. Source
Regulatory: The California regulatory environment prevented refineries from planning in advance for first sales from the Santa Ynez Unit. Source
Financial: The term loan B carries a 15.0% coupon, rising quarterly amortization and a 100% excess cash flow sweep. Source
Financial: The revolving credit facility has a $0 borrowing base, so it provides no borrowing capacity at present. Source
External: Widened differentials were cited alongside midstream throughput constraints as a factor in the second-half capex budget. Source

Earlier plans management reported on

Not stated: The refinancing was expected in Q2 2026 in the first-quarter release; the company reports it completed on July 2, 2026.
Not stated: Second-half 2026 midpoint capex reduced by 41% to $85 million; the prior plan's figure is not stated in the documents. Source

Other quarters

Summarised with AI from the documents the company filed with the SEC. Every point is checked against the filing before it is shown: management’s own words word for word, figures against the line or table row they come from. A point that fails the check is left out. Source opens the filing at that line.

As filed with the SEC

Open the filing on EDGAR

Sable Offshore Corp. Reports Second Quarter 2026 Financial and Operational Results

Houston, August 10, 2026 - Sable Offshore Corp. (“Sable,” or the “Company”) (NYSE: SOC) today announced its second quarter 2026 financial and operational results.

Second Quarter 2026 Financial Results

Achieved $137.1 million in total revenue and generated $9.4 million of positive cash flows from operating activities in the second quarter of 2026, representing the first full quarter of revenue generation and positive operating cash flow since inception.
Reported average daily net sales volumes of approximately 21 thousand barrels of oil per day while the Company increased production and worked through midstream constraints.
Exited the second quarter with oil sales of approximately 40 thousand net barrels of oil per day, representing a 149% entry to exit oil sales growth rate compared to the first day of the quarter.
Reported $39.4 million of capital expenditures in the second quarter.
Ended the quarter with 154,531,910 shares of Common Stock outstanding.

Financial Updates

Completed refinancing transactions on July 2, 2026, the proceeds of which were used to repay the former EM Senior Secured Term Loan and extend our maturity runway to year-end 2028.

- $675.0 million Senior Secured Term Loan B (the “TLB”) due December 15, 2028. The TLB has a 15.0% annual coupon, quarterly mandatory amortization payments of 2.5% per quarter in 2H 2026 increasing to 5.0% per quarter in 2027 and beyond, and 100% quarterly excess cash flow sweep.

- $345.0 million 6.5% Convertible Senior Notes due July 1, 2031. The Convertible Senior Notes have a $4.00/share initial conversion price.

- $115.0 million of Common Stock issued at a share price of $3.08/share.

- $500.0 million Senior Revolving Credit Facility (the “RCF”) designed for commodity hedging purposes. The RCF has a borrowing base of $0 and matures on December 15, 2028 alongside the TLB.

Commenced commodity hedging program with $65/Bbl Brent floor prices and fulfilled post-closing requirements of the TLB. We expect to opportunistically hedge additional volumes as production ramps up.
No ATM equity sales have occurred in Q3 2026 to date.

Second Quarter 2026 Operational Results

Produced at an average rate of 723 barrels of oil per day, per well, throughout the quarter from an average of 35 producing wells per day.
An average of approximately 39 wells were online throughout the month of June 2026, representing a 50% increase over approximately 26 wells online on average in April 2026.
Las Flores Canyon crude oil inventory grew 49% in the quarter from 212,390 to 316,495 barrels. Crude oil in inventory as of August 9, 2026 was approximately 224,000 barrels.
Progressed field operations at the Santa Ynez Unit (“SYU”), the Las Flores Canyon Midstream Processing Facility (“LFC”), and the Santa Ynez Pipeline System (“SYPS”) towards steady state operations.
Resumed oil production from Platform Heritage in early April 2026.

Operational Updates

July 2026 preliminary oil sales estimate of approximately 38,000 gross barrels of oil per day. August 2026 oil sales average to date is approximately 42,000 gross barrels of oil per day through August 9th.
In July 2026, an average of approximately 47 wells at Platforms Harmony and Heritage were online, producing an average of approximately 721 gross barrels of oil per day per well. Sable expects to bring all 77 production wells on these two platforms online during the third quarter of 2026 and expects Platform Hondo to come online in September 2026.
Wireline campaign for Perforation Additions (“Perf Adds”) and producing well optimization at Platform Harmony commenced in August 2026.
Five completed Perf Adds forecasted to produce an incremental 600 estimated gross barrels of oil per day, each, are expected to come online at Platform Hondo along with the restart of the platform in September 2026.
An additional four Perf Adds at Platform Hondo forecasted to produce an incremental estimated 600 gross barrels of oil per day are planned for completion and to be brought online in early Q4 2026.

Midstream and Brent Crude Oil Marketing Update

Due to the California regulatory environment, local refineries were not able to plan in advance for SYU first sales and ultimately were forced to displace various imported cargos in the second quarter. As a result, Sable incurred $18.5 million of non-recurring demurrage charges throughout the quarter, recognized in operational expenses.
The sudden supply influx of Pacific Outer Continental Shelf (“Pacific OCS”) crude has forced refiners to temporarily limit throughput of Pacific OCS crude and charge quality deducts for sulfur content and other items.
Platform Hondo is expected to produce lower sulfur content oil, which should bring field-wide sulfur content to normal levels upon planned restart in September 2026.
Chemical-based solutions are expected to be tested in Q4 2026 that would potentially sweeten SYU crude production and lower sulfur content with full implementation anticipated in 2027.
Starting in July 2026, Sable was temporarily constrained to a maximum of 40,000 average gross barrels of oil per day of oil sales throughput by downstream partners. We expect this short-term constraint to be alleviated starting in the back half of August.
California refineries are expected to adjust their crude oil supply slate starting in September 2026 to begin accepting more Pacific OCS barrels from the SYU and less imported barrels, alleviating the SYU throughput constraint altogether.
Sable is also in active negotiations to implement waterborne crude oil marketing solutions from existing marine terminals in the Los Angeles area in the near-term in order to improve marketing optionality.
Additionally, the pending acquisition of the Crimson Utilities (San Pablo Bay Pipeline) pipeline network by a third party could provide further relief and marketing optionality to California oil producers with access to the San Francisco refinery market once that pipeline potentially restarts operations.

Guidance

Reduced 2H 2026E midpoint capex by 41% to $85 million. Planned capex reductions are intended to optimize cash flow and accelerate debt amortization.
Increased 2027 expected oil ratio to approximately 100% from prior midpoint of 91% due to the deferral of POPCO gas plant capital items and stronger than anticipated oil cut from producing wells.
In light of the short-term midstream throughput constraints and widened differentials, Sable’s 2H 2026 capex budget is focused on maintaining asset integrity, maximizing midstream throughput, executing high return Perf Adds, and well optimization work.
FY 2027E guidance reflects the expected normalization of fully ramped, post-restart operations.

	2H 2026E				FY 2027E
Sales
Gross Average Daily Sales (Boe/d)		47,500	‒	52,500				50,000	‒	55,000
Working Interest / Net Revenue Interest (%)				83.6%				83.6%
Net Average Daily Sales (Boe/d)		40,000	‒	45,000	42,500	‒		47,500
% Oil	~100.0%				~100.0%
Estimated Marketing and GP&T Deduct ($/Bbl)		$24.00	‒	$28.00				$21.00	‒	$25.00
Cash Costs ($ / Net Boe)
Lease Operating Expense		$17.00	‒	$21.00				$9.00	‒	$12.00
Cash General & Administrative		$6.00	‒	$9.00				$3.50	‒	$6.50
Severance & Ad Valorem Taxes (% of Revenue)	0.5%		‒	1.0%			0.5%		‒	1.0%
Capital Expenditures ($MM)
Total Capex		$75	‒	$95				$80	‒	$100

Note: No benefits from waterborne marketing solutions, chemical treatments, and broader California infrastructure improvements assumed in guidance.

Brent Crude Oil Hedging

Type		Term		Settlement Index		Average Volumes (Mbo/d)		Bought Put		Sold Call
Costless Collars		July 1, 2026 - December 31, 2026		NYMEX Brent		28.0		$65.00		$89.39
	January 1, 2027 - December 31, 2027		NYMEX Brent		25.0		$65.00		$80.00
	January 1, 2028 - December 31, 2028		NYMEX Brent		21.0		$65.00		$73.17

Management Commentary

Chairman and Chief Executive Officer, Jim Flores said “The Sable team was able to make strong progress in ramping up operations in the second quarter. We are encouraged by the productivity of the wells at the SYU with their higher than expected production with minimal to no observable decline.” He continued, “Through the various solutions we have identified, we look forward to working with our midstream and downstream partners to maximize the amount of domestic crude oil from the SYU getting to market for the benefit of California consumers and the U.S. Military and its allies globally.”

About Sable

Sable Offshore Corp. is an independent oil and gas company, headquartered in Houston, Texas, focused on responsibly developing the Santa Ynez Unit in federal waters offshore California. The Sable team has extensive experience safely operating in California.

Forward-Looking Statements

Forward-looking statements notice

The information in this press release includes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. When used in this press release, the words “could,” “should,” “will,” “may,” “believe,” “anticipate,” “intend,” “estimate,” “expect,” “project,” “continue,” “plan,” “forecast,” “predict,” “potential,” “future,” “outlook,” and “target,” the negative of such terms and other similar expressions are intended to identify forward- looking statements, although not all forward-looking statements will contain such identifying words. These statements are based on the current beliefs and expectations of Sable’s management and are subject to significant risks and uncertainties. Actual results may differ materially from those described in the forward-looking statements. Factors that could cause Sable’s actual results to differ materially from those described in the forward-looking statements include: the ability to recommence full production of the SYU assets; the cost and time required therefor, and production levels once recommenced; availability of future financing; restrictions in existing or future debt agreements or structured or other financing arrangements; uncertainties related to new technologies, geographical concentration of operations, environmental risks, weather risks, security risks, drilling and other operating risks, regulatory changes and regulatory risks, including risks relating to PHMSA’s regulatory oversight of the SYPS, the DPA Order and the potential implementation of the OS&T Strategy or the Buoy Strategy; our ability to consummate a debt refinancing of our Senior Secured Term Loan B and the timing and terms thereof; our financial performance; global economic conditions and inflation; increased operating costs; lack of availability of drilling and production equipment, supplies, services and qualified personnel; geographical concentration of operations; environmental and weather risks; regulatory changes and uncertainties; litigation, complaints and/or adverse publicity; privacy and data protection laws, privacy or data breaches, or loss of data; our ability to comply with laws and regulations applicable to our business; and other one-time events and other factors that can be found in Sable’s Annual Report on Form 10-K for the year ended December 31, 2025, and any subsequent Quarterly Report on Form 10-Q or Current Report on Form 8-K, filed with the Securities and Exchange Commission, which are available on Sable’s website (www.sableoffshore.com) and on the Securities and Exchange Commission’s website (www.sec.gov). Except as required by applicable law, Sable undertakes no obligation to publicly release the result of any revisions to these forward-looking statements to reflect the impact of events or circumstances that may arise after the date of this press release.

Contacts
Harrison Breaud
Vice President, Finance & Investor Relations
IR@sableoffshore.com
713-579-8111