Sable Offshore (SOC) FY2025 10-K Risk Factors: 9 New, 4 Dropped

What the changes say

Sable Offshore shifted its restart strategy to an OS&T vessel, raising startup estimates to $475.0 million.

What changed since the prior 10-K

New

NewRisks Related to Recommencing Oil Sales
In order to commence operations pursuant to the OS&T Strategy, we will require clearances and permitting, including from BOEM
We need BOEM and other regulatory clearances for our OS&T Strategy, risking delays past our fourth-quarter 2026 commercial sales timeline.
NewRisks Related to Recommencing Oil Sales
We returned a number of wells to production on Platform Harmony beginning in May 2025, and we expect to return a number of additional wells to production on Platforms Harmony, Heritage and Hondo. Operations on offshore platforms are subject to numerous risks and potential delays
Wells on Platform Harmony brought back into production in May 2025 face uncertainty regarding the timing and amount of natural production declines.
NewRisks Related to Recommencing Oil Sales
There is no guarantee that we will have sufficient cash to recommence oil sales
We lack sufficient cash on hand to recommence oil sales via the Santa Ynez Pipeline or OS&T Strategy without raising additional capital.
NewRisks Related to the Business of the Company
Under the terms of the Senior Secured Term Loan, the loans thereunder will mature on the earlier of (i) March 31, 2027 or (ii) the date falling 90 days after first sales of Hydrocarbons, and the terms on which we will be able to refinance the Senior Secured Term Loan will depend on then-prevalent market conditions
Our Senior Secured Term Loan matures on March 31, 2027, or 90 days after first hydrocarbon sales, exposing us to refinancing risks.
NewRisks Related to the Business of the Company
Changes in tax law may materially adversely affect our financial condition, results of operations and cash flows
The One Big Beautiful Bill Act enacted on July 4, 2025, revised business tax provisions including bonus depreciation and interest expense limitations.
NewRisks Related to the Business of the Company
lead to losses of financial assets, sensitive information, critical infrastructure or capabilities essential to our operations and could have a material adverse effect on our reputation, financial position, results of operations or cash flows
Activist protests, sabotage, and eco-terrorism against our oil and gas assets could cause extended operational interruptions and property damage.
NewRisks Related to Being a Public Company
We are, and may continue to be, subject to short selling strategies and related public allegations, which could lead to a decline in the price of our Common Stock and have a material adverse effect on our reputation and results of operations
Short sellers, including Hunterbrook Media which issued a report on October 31, 2025, have subjected us to allegations and stock price declines.
NewRisks Related to Being a Public Company
The Special Committee’s investigation remains underway. In addition, the Company has received subpoenas for documents from the SDNY and SEC (the “Government Requests”)
The Special Committee investigation and document subpoenas from the SDNY and SEC could result in criminal or civil penalties and significant legal expenses.
NewRisks Related to Being a Public Company
We no longer qualify as an “emerging growth company” and will be required to comply with certain provisions of the Sarbanes-Oxley Act. We can no longer take advantage of reduced disclosure requirements applicable to emerging growth companies
We lost our emerging growth company status as of December 31, 2025, increasing our compliance costs and Sarbanes-Oxley Section 404 audit requirements.

Dropped

DroppedRisks Related to Restart of Production
There is no guarantee that we will have sufficient cash to restart production of the SYU Assets
DroppedRisks Related to the Business of the Company
Under the terms of the Senior Secured Term Loan Agreement, restarting production will trigger a springing maturity date following a specified grace period, and the terms on which we will be able to refinance the Senior Secured Term Loan Agreement, if necessary, will depend on then-prevalent market conditions
Cash sufficiency to restart production of SYU Assets.
DroppedRisks Related to the Business of the Company
If engaged in intrastate common carrier operations, our financial results with respect to the Pipelines will primarily depend on the outcomes of ratemaking proceedings with the California Public Utilities Commission and we may not be able to earn an adequate rate of return in a timely manner or at all
DroppedRisks Related to Being a Public Company
We are an “emerging growth company” and the reduced reporting and disclosure requirements applicable to emerging growth companies could make our Common Stock less attractive to investors

Reworded

82% rewrittenRisks Related to Being a Public Company
We cannot assure you that our securities will continue to be listed on the NYSE in the future. In order for our securities to remain listed on the NYSE, we must maintain certain financial, distribution and stock price levels
Updated formatting for NYSE delisting and penny stock risk disclosures.
79% rewrittenRisks Related to Recommencing Oil Sales
Our assumptions and estimates regarding the total costs associated with recommencing oil sales may be inaccurate
Replaced $152.0 million pipeline restart cost estimate with $475.0 million for the OS&T Strategy targeting Q4 2026.
Was: Our assumptions and estimates regarding the total costs associated with restarting production may be inaccurate
75% rewrittenRisks Related to the Business of the Company
Environmental groups may initiate litigation and take other actions to delay or prevent us from obtaining or maintaining required approvals to recommence oil sales
Added PHMSA and BOEM as permitting agencies and referenced environmental group litigation risks.
Was: Environmental groups may initiate litigation and take other actions to delay or prevent us from obtaining required approvals to restart and continue production
74% rewrittenRisks Related to the Business of the Company
At this time, we cannot predict the potential future actions that may result from these orders or how such actions might potentially impact our operations
Added Governor Newsom signing SB 237 on September 19, 2025, requiring spike hydrostatic testing and coastal permits for idle pipelines.
62% rewrittenRisks Related to the Business of the Company
We do not own all of the land on which our assets are located or all of the land that we must traverse in order to conduct our operations. There are disputes with respect to certain of the rights-of-way or other interests and any unfavorable outcomes of such disputes could require us to incur additional costs
Added leases alongside surface use agreements and rights-of-way as sources of land access.
49% rewrittenRisks Related to the Business of the Company
Attempts by the California state government to restrict the production of oil and gas could negatively impact our operations and result in decreased demand for fossil fuels in California
Expanded California regulatory scope to include hydrocarbon processing and transportation, adding specific violation penalties.
47% rewrittenRisks Related to the Business of the Company
Our business could be negatively affected by security threats, including cybersecurity threats, destructive forms of protest and opposition by activists and other disruptions
Minor phrasing adjustments regarding security threats and infrastructure protection.
37% rewrittenRisks Related to the Business of the Company
Restrictive covenants in the Senior Secured Term Loan or any future agreements governing our indebtedness could limit our growth and our ability to finance our operations, fund our capital needs, respond to changing conditions and engage in other business activities that may be in our best interests
Removed the term Agreement when referring to the Senior Secured Term Loan.
Was: Restrictive covenants in the Senior Secured Term Loan Agreement or any future agreements governing our indebtedness could limit our growth and our ability to finance our operations, fund our capital needs, respond to changing conditions and engage in other business activities that may be in our best interests
35% rewrittenRisks Related to the Business of the Company
We are subject to complex federal, state, local and other laws, regulations and permits that could adversely affect the cost, manner, ability or feasibility of conducting our operations
28% rewrittenRisks Related to the Business of the Company
The Inflation Reduction Act of 2022 could accelerate the transition to a low carbon economy and will impose new costs on our operations
25% rewrittenRisks Related to Being a Public Company
Because there are no current plans to pay cash dividends on our Common Stock in the foreseeable future, you may not receive any return on investment unless you sell your shares of our Common Stock at a price greater than what you paid for it
Was: Because there are no current plans to pay cash dividends on our Common Stock for the foreseeable future, you may not receive any return on investment unless you sell your shares of our Common Stock at a price greater than what you paid for it
22% rewrittenRisks Related to the Business of the Company
Climate change legislation or regulations restricting emissions of “greenhouse gases,” or GHGs, could result in increased operating costs and reduced demand for the oil, natural gas and NGLs we expect to produce
20% rewrittenRisks Related to the Business of the Company
Loss of our key executive officers or other key personnel, or an inability to attract and retain such officers and personnel, could negatively affect our business and, in one instance, could cause a default under the primary agreement governing our existing indebtedness

All 49 risk factors

Headings as the filing states them, in filing order.

Risks Related to Recommencing Oil Sales

01In order to commence operations pursuant to the OS&T Strategy, we will require clearances and permitting, including from BOEMNew
02We returned a number of wells to production on Platform Harmony beginning in May 2025, and we expect to return a number of additional wells to production on Platforms Harmony, Heritage and Hondo. Operations on offshore platforms are subject to numerous risks and potential delaysNew
03Our assumptions and estimates regarding the total costs associated with recommencing oil sales may be inaccurate79% rewritten
04There is no guarantee that we will have sufficient cash to recommence oil salesNew

Risks Related to the Business of the Company

05If commodity prices decline and remain depressed for a prolonged period, our business may become uneconomical and result in additional write downs of the value of our properties, which may adversely affect our financial condition and our ability to fund operations
06An increase in the differential between the NYMEX or other benchmark prices of oil and natural gas and the wellhead price we expect to receive for our future oil sales could significantly reduce our cash flow and adversely affect our financial condition
07Our hedging strategy in the future may not effectively mitigate the impact of commodity price volatility from our cash flows, and our hedging activities could result in cash losses and may limit potential gains
08The enactment of derivatives legislation could have an adverse effect on our ability to use derivative instruments to reduce the effect of commodity price, interest rate and other risks associated with our business
09Development and production of oil, natural gas and NGLs in offshore waters have inherent and historically higher risk than similar activities onshore
10Oil and natural gas producers’ operations are substantially dependent on the availability of water and the disposal of waste, including produced water and drilling fluids. Restrictions on the ability to obtain water or dispose of waste may impact our operations
11The unavailability or high cost of rigs, equipment, supplies and crews could delay our operations, increase our costs and delay forecasted revenue
12The third parties on whom we rely for transportation services are subject to complex federal, state and other laws that could adversely affect the cost, manner or feasibility of conducting our business
13Our business depends in part on pipelines, gathering systems and processing facilities owned by us or others. Any limitation in the availability of those facilities could interfere with our ability to market our oil, natural gas and NGL production
14Loss of our key executive officers or other key personnel, or an inability to attract and retain such officers and personnel, could negatively affect our business and, in one instance, could cause a default under the primary agreement governing our existing indebtedness20% rewritten
15We may incur losses as a result of title defects or deficiencies in our properties
16We do not own all of the land on which our assets are located or all of the land that we must traverse in order to conduct our operations. There are disputes with respect to certain of the rights-of-way or other interests and any unfavorable outcomes of such disputes could require us to incur additional costs62% rewritten
17Under the terms of the Senior Secured Term Loan, the loans thereunder will mature on the earlier of (i) March 31, 2027 or (ii) the date falling 90 days after first sales of Hydrocarbons, and the terms on which we will be able to refinance the Senior Secured Term Loan will depend on then-prevalent market conditionsNew
18Restrictive covenants in the Senior Secured Term Loan or any future agreements governing our indebtedness could limit our growth and our ability to finance our operations, fund our capital needs, respond to changing conditions and engage in other business activities that may be in our best interests37% rewritten
19We may in the future refinance our existing indebtedness or incur new indebtedness at variable rates and without the option to pay interest in-kind, which would subject us to interest rate risk and could cause our debt service obligations to increase significantly
20Our business plans require a significant amount of capital. In addition, our future capital needs may require us to issue additional equity or debt securities that may dilute our stockholders or introduce covenants that may restrict our operations or ability to pay dividends
21We are exposed to trade credit risk in the ordinary course of our business activities
22We may be unable to compete effectively with larger companies
23We are subject to complex federal, state, local and other laws, regulations and permits that could adversely affect the cost, manner, ability or feasibility of conducting our operations35% rewritten
24Changes in tax law may materially adversely affect our financial condition, results of operations and cash flowsNew
25The listing of a species as either “threatened” or “endangered” under the U.S. Endangered Species Act and/or the California Endangered Species Act could result in increased costs, new operating restrictions, or delays in our operations, which could adversely affect our results of operations and financial condition
26Conservation measures, technological advances and increasing public attention and activism with respect to climate change and environmental matters could reduce demand for oil, natural gas and NGLs and have an adverse effect on our business, financial condition and reputation
27Climate change legislation or regulations restricting emissions of “greenhouse gases,” or GHGs, could result in increased operating costs and reduced demand for the oil, natural gas and NGLs we expect to produce22% rewritten
28Attempts by the California state government to restrict the production of oil and gas could negatively impact our operations and result in decreased demand for fossil fuels in California49% rewritten
29At this time, we cannot predict the potential future actions that may result from these orders or how such actions might potentially impact our operations74% rewritten
30Our assets are located exclusively onshore and offshore in California, making us vulnerable to risks associated with having operations concentrated in this geographic area
31All of our operations are conducted in areas that may be at risk of damage from fire, mudslides, earthquakes or other natural disasters
32Increasing attention to environmental, social and governance (“ESG”) matters may impact our business
33Environmental groups may initiate litigation and take other actions to delay or prevent us from obtaining or maintaining required approvals to recommence oil sales75% rewritten
34The Inflation Reduction Act of 2022 could accelerate the transition to a low carbon economy and will impose new costs on our operations28% rewritten
35The cost of decommissioning and the cost of financial assurance to satisfy decommissioning obligations are uncertain
36Our business could be negatively affected by security threats, including cybersecurity threats, destructive forms of protest and opposition by activists and other disruptions47% rewritten
37lead to losses of financial assets, sensitive information, critical infrastructure or capabilities essential to our operations and could have a material adverse effect on our reputation, financial position, results of operations or cash flowsNew

Risks Related to Being a Public Company

38The market prices of our securities could be highly volatile or may decline regardless of our operating performance. You may lose some or all of your investment
39We are, and may continue to be, subject to short selling strategies and related public allegations, which could lead to a decline in the price of our Common Stock and have a material adverse effect on our reputation and results of operationsNew
40The Special Committee’s investigation remains underway. In addition, the Company has received subpoenas for documents from the SDNY and SEC (the “Government Requests”)New
41We cannot assure you that our securities will continue to be listed on the NYSE in the future. In order for our securities to remain listed on the NYSE, we must maintain certain financial, distribution and stock price levels82% rewritten
42Future sales, or the perception of future sales, of our Common Stock by us or our existing stockholders in the public market could cause the market price for our Common Stock to decline
43Our issuance of additional shares of Common Stock or convertible securities may dilute your ownership of us and could adversely affect our stock price
44Members of our management team and our Board and their respective affiliated companies have been, and may from time to time be, involved in legal proceedings or governmental investigations unrelated to our business
45If securities or industry analysts do not publish research or reports about us, or publish negative reports, our stock price and trading volume could decline
46Our operating results may fluctuate significantly, which makes our future operating results difficult to predict and could cause our operating results to fall below expectations or any guidance it may provide
47Changes in laws, regulations or rules, or a failure to comply with any laws, regulations or rules, may adversely affect our business, investments and results of operations
48We no longer qualify as an “emerging growth company” and will be required to comply with certain provisions of the Sarbanes-Oxley Act. We can no longer take advantage of reduced disclosure requirements applicable to emerging growth companiesNew
49Because there are no current plans to pay cash dividends on our Common Stock in the foreseeable future, you may not receive any return on investment unless you sell your shares of our Common Stock at a price greater than what you paid for it25% rewritten

Other Sable Offshore 10-Ks

FY2024 10-K risk factors
44 risks
Sable Offshore relies entirely on restarting production of the SYU Assets in California, requiring $152.0 million and regulatory approvals.
Filed Mar 17, 2025

About this page

The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.