Sable Offshore Corp. (NYSE:SOC) saw its stock tumble 25% on Monday after a California court issued a tentative ruling indicating it would reject the company’s claims against the California Coastal Commission.
The Santa Barbara Superior Court’s tentative decision, set to be reviewed at an October 15 hearing, would mark a major setback in Sable’s ongoing legal battle over cease-and-desist orders related to its pipeline repair program.
Sable is seeking damages tied to the Commission’s actions, which it claims negatively impacted its operations. However, the company stressed that the ruling would not affect the potential restart of petroleum transport through its Las Flores Pipeline System. Oil and gas production from the federal Santa Ynez Unit and flows to the Las Flores Canyon processing facilities would continue as planned.
Sable said it intends to appeal if the tentative ruling is finalized and will keep pursuing declaratory relief and inverse condemnation claims exceeding $347 million. The company completed pipeline system repairs and hydrotesting in May 2025 under a federal consent decree.
In a statement following the court’s decision, Chairman and CEO Jim Flores expressed disappointment but reaffirmed the company’s strategy. Sable is evaluating an Offshore Storage & Treating Vessel plan, a method previously used for Santa Ynez Unit production between 1981 and 1994, when over 160 million barrels of oil equivalent were produced.
The company believes that this alternative approach would enable it to refinance its current term loan, even if California regulators do not approve restarting the pipeline.
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