Legal and Regulatory Momentum Positions Sable Offshore for Cash Flow Upside and Supports Buy Rating

Benchmark Co. analyst Subash Chandra maintained a Buy rating on Sable Offshore today and set a price target of $20.00.

Subash Chandra has given his Buy rating due to a combination of factors tied to Sable Offshore’s improving legal and operational outlook. He notes that the Santa Ynez Unit is now closer than ever to resuming operations after the Ninth Circuit Court of Appeals declined to grant environmental groups an emergency stay, indicating that their arguments did not meet the legal standard required to halt progress. He also highlights that both federal and California regulators are aligned in supporting a corrosion protection waiver, recognizing that Sable’s upgraded monitoring system provides safeguards comparable to traditional regulatory requirements. This waiver, underpinned by a detailed 24-point monitoring plan agreed with regulators, reduces regulatory uncertainty around a key section of the pipeline and supports the path to restart.
At the same time, Chandra emphasizes that earlier legal challenges at the state level are likely diminished in importance following the reclassification of the pipeline system from intrastate to interstate, shifting the venue toward a more favorable federal framework. He believes the recent federal ruling, while not ending all litigation, signals a constructive shift away from the prior pattern of delays. On the fundamentals, he sees meaningful upside potential, arguing that the stock could possibly double as oil volumes start moving through the pipeline, cash flow from sales is realized, and legacy Exxon-related debt is refinanced. In his view, the combination of improving legal momentum, regulatory alignment, and forthcoming cash generation justifies maintaining a Buy recommendation on SOC.

In another report released on December 31, Roth MKM also maintained a Buy rating on the stock with a $22.00 price target.